Inflation is the general increase in the prices of goods and services in an economy. 

It is no surprise that yesterday the National Bureau of Statistics reported that Nigeria recorded an increase in inflation to 15.63% in the generally fun month of December 2021, which is widely revered for the pop culture quip “Detty December” by Millennial and Generation Z Nigerians. This was from the 15.40% inflation rate recorded in November 2021. Prior to the increase in December 2021, Nigeria experienced a fall in inflation for eight consecutive months since March 2021.

As the cost of everything from foodstuff in the market to bolt rides rises, the money in your naira denominated current and savings account loses purchasing power. This simply means that you are now buying less quantity of goods and services for the same amount of money or paying more to enjoy the same level of consumption.

Individuals and institutions seek investment opportunities that protect them from inflation and secure their purchasing power. Kwakol offers opportunities for returns that beat inflation and more.

But don't be alarmed. There is good news and post-enjoyment clarity tips to follow in order to protect your pocket against inflation.

Buy or trade GOLD

Gold has historically been referred to as a traditional hedge against inflation. In countries like Nigeria where its currency is losing value and being wrecked by double digits inflation, gold is looked upon as an alternative store of value and we think you should do so too.

You might be wondering, “where do I get the money to buy gold after a detty December?”.

A feasible way to protect your investments and hard-earned savings as well as earn from gold is by trading Contract for Differences (CFDs) for Gold with Kwakol Markets. This delivers the value of trading gold without all the logistical and security nightmare that comes with buying, owning, and storing physical gold in Nigeria. 

CFDs are contracts that trade between the opening prices and closing prices of a security without actually owning or buying the asset with which the security is drawn from - in this case, Gold is the underlying asset. A security is a financial instrument that is traded to raise capital in private and public markets. 

Invest in Commodities

Commodities like Oil & Gas, precious metals like Copper and Silver, Grains, and Foreign Currencies have traditionally been looked upon as inflation indicators. When the price of a commodity rises, so does the price of the products made from that commodity and thus, on an incremental basis, traders or investors in these commodities effectively hedge their investments against inflation this way. Most times, using exchange-traded funds (ETFs) as a means to invest in commodities is now accessible to everyone. An Exchange-Traded Fund is a type of investment fund and exchange-traded product that tracks the performance of an index or a "basket" of securities (such as shares, bonds, commodities, etc.). ETFs are listed on a stock exchange and traded similarly to stocks; they allow investors to diversify their investments at a lower cost and gain access to diverse asset classes like equities, commodities, currencies, and fixed income.

Hold little CASH, diversify your investments instead

It is now conventionally acknowledged that cash is the most vulnerable asset during inflationary times like the current one that Nigeria is experiencing. Thus, it is advisable to hold little cash (if possible, keep cash only for everyday transactions and not in savings) and diversify investments instead. One’s investment portfolio should have assets and financial instruments that can withstand tough inflationary environments like Nigeria. These assets can include commodities, stocks (preferably traded on the S&P 500), crypto (YES!!! CRYPTO LIKE BITCOIN), and Oil & Gas and should be proportionally balanced in one’s portfolio as an effective risk management strategy.

You can invest in commodities and trade forex, CFDs, cryptos, and stocks with up to 1:1000 LEVERAGE with a true ECN broker and also access financial investment resources and education with Kwakol. You can start trading on Kwakol with as low as a $10 deposit and enjoy lightning-fast execution, tight spreads, and low commissions. Learn more!