If you’ve visited the supermarket or the petrol station recently, you’ve no doubt been unpleasantly surprised by the massive rise in prices. Between the ongoing war in Ukraine, supply chain problems and a recovering global economy, it seems economies have been hit by the perfect storm for inflation. So how can investors benefit from these price rises?
When investors see red across their portfolios, the emotions this can trigger often lead to poor decisions. So, here’s a short guide to navigating stormy markets.
Part 1: Before the crash
The biggest gains from market dislocations are born before the crash even begins. But that doesn’t mean trying to predict recessions and sell in advance.
A 50% profit in 45 days. Sounds too good to be true, right? Well, that’s exactly what the infamous Charles Ponzi offered to his ‘investors’ back in 19201. If it’s not already clear, investors did not receive those promised returns. Instead, they were the victims of what we now call a Ponzi scheme.