The record of purchases of short-term bonds confirms how much Poles look for places where their savings will not lose due to high inflation. Record inflation, however, is not only a problem of high prices. – Today, financial discipline means not only investing savings with a well-thought-out strategy, but most of all taking care of liquidity. Because the king of the situation is those who have cash at their disposal, which they can quickly mobilize – emphasizes Radosław Jodko, an investment expert. So how do you avoid mistakes and how to wisely manage your finances in times of turbulent markets?
In Poland, we have the highest inflation in 25 years. In June it reached the level of 15.6% and this is not the end, because NBP analysts predict a peak in the range even above 26% per annum. The analysis of mBank’s economists forecasts that we will also enter 2024 with high inflation and a higher than previously expected unemployment rate.
“Double-digit inflation will stay with us for a longer time and will remain the number 1 topic in any market analysis for the next several months. The turmoil in the financial markets is on such a scale that we can safely say that this crisis is much more serious than the collapse of Lehman Brothers, which has marked the turning point of the crisis so far,” believes Radosław Jodko, an investment expert from RRJ Group.
In his opinion, not only is it going to be an expensive summer, but also an even more expensive autumn and the whole next year.
“The energy crisis will have a negative impact and will deepen the depression, companies find it more and more difficult to establish long-term contacts, which will also affect the labor market. No wonder that individual investors figure out where to invest their savings so that inflation does not eat them up. The record on the retail bond market – let us remind you that Poles bought them for PLN 14 billion in June – confirms how much we are looking for ways to prevent inflation from eating our savings. This, moreover, is often associated with a trap that we fall into. Because during such turbulences on the market, it is necessary to think not only about possible profits, but most of all about liquidity,” notes Jodko.
“Fluency concerns two areas in particular. Firstly, it is good to manage finances in home budgets so that you have cash that you can freely dispose of when, for example, in a family one of the spouses loses their job. Second, liquidity is crucial when considering any investment of your capital. For example, it is commonly believed that real estate is the best way to protect your savings. And it doesn’t always have to be a good move. Is it worth buying a house in Spain or Italy today? I would advise you to think it over seriously, because the liquidity of such an investment is negligible, not to say none. Are we sure that this investment will pay off? Do we know how rents, maintenance and energy will grow? What if we suddenly need cash? Is such a capital lock for many years a good idea? Not necessarily. Today, it is the owners of cash that can feel more confident and manage the situation more freely, also in negotiations,” emphasizes Radosław Jodko.
“At the same time, it draws attention to several other elements that affect the economic situation and the wealth of portfolios. – At the moment it is also difficult to predict the euro / dollar relation, which is a clear signal of economic slowdown both in the United States and in the euro area. The equalization of the euro and the dollar in June turned out to be a sensation on the financial markets. The weakening euro also affects the portfolios of individual customers, as it translates directly into an increase in the prices of imported goods, which in turn entails even higher inflation,” explains Jodko.
“Double-digit inflation is not only in Poland, but also in Spain and the Czech Republic, where it is already over 17%. In the United States, inflation is also record-high, with inflation rising to 9.1% higher than expected. – The troubles of the economies of almost every country are also influenced by the energy crisis, the painful effects of which can be felt already in the autumn. The number of job offers is also decreasing,” she says.
“In the crazy rush for attractive offers of capital investments, it is good not only to count how much capital and for how long we can freeze in a long-term investment, or maybe it is better to focus on short-term and on such a distribution of savings in which we always have cash that we can use. For what we have not thought about for many years, it is worth counting how much and in which bank we have money to give away. What are our debits, violated credit card limits, revolving loans? Pay them off today. Because they will cost us much more in the coming months. Today I see a lot of ill-considered investment decisions. And without the right approach, strategy and calculations, losses are greater than those that we would incur as a result of losing the purchasing value of our savings,” emphasizes Radosław Jodko from RRJ Group.
Author: Radoslaw Jodko – RRJ Group
