Over time, your money will have less value as the cost of goods and services increases. This is known as inflation.
Inflation and markets often have a tempestuous relationship; when the former goes too low, it raises fears of a depressed economy, yet when inflation rates rise, purchasing power decreases and your money buys less. According to the US Bureau of Labor Statistics’ Consumer Price Index, 2022’s prices are about 1.7 times higher than average prices since 2000, which means that the American dollar today is worth around 40% less than a dollar in 2000.
You’ll usually notice a surge in interest rates as inflation increases. Central banks raise interest rates in an attempt to bring down demand and thereby slow the rise in prices.
High interest rates often lead to high yielding savings accounts but it’s imprudent to put all your reserves in one basket. As people buy less, companies manufacture less. This often leads to lay-offs and high unemployment that could kick start a recession; something governments try very hard to avoid.
Another consequence of high interest rates is an increase in mortgage rates and higher APRs (annual percentage rate) on credit cards, making it more expensive to buy high-value items like real estate, cars etc.
Most financial advisors recommend diversifying your portfolio to spread the risk across various asset classes. Real estate is a popular asset class worldwide because it is tangible, there are usually high barriers for entry (capital investment, experience etc.) and there is only a finite amount of land available.
SafeRE is a secure, block-chain based powerful and easy-to-use real estate financing solution. In an inflationary market with high interest rates, real estate gets more expensive. SafeRE’s strategy of dividing large projects into fully collateralized (with real estate assets) digital tokens, allows investors to own a stake in developments that would have otherwise been out of their reach. The company has invested across the capital stack – in strategies ranging from core to distressed, in student accommodation, in logistics, in residential and hospitality-related themes. Clients therefore gain exposure to a variety of sectors and can opt for projects that are lucrative in the given market conditions.
Investors also have access to an international portfolio and can access property in countries with markets that are more resilient to current inflationary trends.
The platform’s digital wallet allows users to store digital multi-currency and investment tokens, which reduces the impact of currency exchange fees, a particular concern in volatile markets.
The advantage of SafeRE in any market
Real estate tokenization allows people to invest in a plethora of global opportunities from the comfort of their homes. The tokens are traceable, transparent and trustworthy with excellent protection against fraud/cyber hacking.
SafeRE also ensures clients invest in real estate with a manager who is regulated by a respected central bank. It is a fully digitalized real estate marketplace for asset owners and investors. The platform aims to provide a better experience for both parties and helps eliminate transaction costs and intermediary fees.