The accelerated rates of inflationary processes, which are observed in Russia, make the problem of the safety of their own savings extremely urgent. There are several ways to mitigate the negative impact of inflation.
How to choose ways to protect money from inflation
There is no universal and absolutely correct way to protect money from inflation today. The most popular methods among Russians are bank deposits, buying foreign currency, investing in liquid instruments (most often in real estate), as well as buying shares in mutual funds. There are other ways, but they come with higher risks.
The most optimal is the diversification of savings, i.e. distribution of funds between different directions. For example, you can keep rubles, currency and gold in one investment portfolio. Or keep part of the funds in banks, and invest the other in shares. This allows you to hedge the risks of loss of savings.
The way to choose the best way to protect against inflation depends on the amount available. For small savings, bank deposits and buying foreign currency will be most optimal, while bonds and real estate purchases may be suitable for large investors.
Finally, one more criterion for choosing an investment instrument is the investor's qualifications and the level of risk of his strategy. For qualified investors, such instruments as stocks and currency risks are available.
Bank deposits
Bank deposits are the least risky way to keep your savings. The main thing is to choose a reliable bank that is part of the deposit insurance system. It is also worth limiting the contribution to the amount of 700 thousand rubles, then it will be guaranteed to be compensated by the state.
However, it should be noted that, despite their reliability, bank deposits today do not have high profitability and do not even cover the inflation rate. So, in December 2013, the average rate on deposits (up to a year) was 7.3% per annum, while inflation in 2013 reached 6.5%. According to the Central Bank of the Russian Federation, in March 2014, the average rates on ruble deposits were 7.02%, while the forecasted inflation rate was 6.3%. At the same time, the rise in prices for certain groups of goods (for example, products and household services) was even higher.
Investments in foreign exchange and foreign exchange deposits
The interest of citizens in investing in foreign currency is due to the anti-records of the ruble against the euro and the dollar, which were observed in the first quarter of 2014. Experts recommend not to panic and not keep all savings in one currency, this helps to minimize currency risks. After all, not one analyst can absolutely accurately predict how the ruble will behave in the future.
Therefore, it is better to divide savings into several parts and store them in different currencies, optimally in the most liquid ones - in dollars, euros and rubles. In this case, the main volume should be in the currency in which most of the expenses are made, most often the ruble.
As for foreign currency deposits, it is impossible to say unambiguously that they are more profitable, because interest on foreign currency deposits is an order of magnitude lower than on ruble deposits. So, now the average rate on foreign currency deposits is 3-4% and it tends to decrease.
Investments in real estate
The unstable situation in the Russian banking sector has increased the popularity among Russians of such areas of investment as real estate. Such investments in the context of rising housing prices allow you to preserve and increase your own funds.
The profitability of investments in real estate purchase depends on the region. For example, in Moscow the rate of growth in the cost of housing has been declining in recent years. If in 2003-2008. it grew annually at a rate of about 30%, then in 2013 - only by 6-7%. At the same time, the cost of secondary housing remained practically unchanged. It is predicted that in the future, the cost of housing will grow by about 8% per year, which is only slightly ahead of inflation and corresponds to the rates on bank deposits.
Purchase of shares
Investing savings in mutual funds allows you to make money by investing in various assets - in stocks, bonds, precious metals, etc. At the same time, the investor does not need to be well versed in the intricacies of the stock market, the management company will earn for it. The scheme of making money on mutual funds is as follows - an investor buys shares and with the growth of the value of the investment portfolio of a mutual fund, the price of a share also increases. The investor receives profit (loss) in the form of the difference between the purchase and sale price of the share.
At the same time, it should be borne in mind that no one guarantees the profitability of shares. It can be significantly higher than the inflation rate, or it can even go into negative values. So, in 2013, the profitability of some telecommunication mutual funds exceeded 50%, and for those focused on the electric power industry, the loss reached 40%.
