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What Is Stagflation?

What Investors Need to Know

by Alex Broudy
Mar 30, 2022

You may have heard the term “stagflation” in recent days and wondered, what it is and why does it matter to me? Stagflation is the combination of a stagnant economy and inflation. Put another way, stagflation occurs when an economy’s gross domestic product (GDP) declines at the same time that the price of goods and services rises (inflation).

Now that the conditions for stagflation are returning to the United States for the first time since the 1970’s, economists and investors are beginning to take note. And for good reason.

Stagflation can put a serious dent in your savings and traditional investments. Typically, when the ability to earn decreases, so do investor appetites. Worse, inflation can eat away at the value of existing gains. So, while it will still take more economic data to see if GDP is declining enough to warrant stagflation, now is a good time for investors to plan ahead.

Planning Ahead

Finding financial instruments that can act as a cash hedge or provide downside protection are great ways to counterbalance the potential for stagflation. To outpace inflation, investors must currently earn more than 7.9% APY on their investments. Here, cryptocurrency yield funds and alternative investments may help.1

Securitize offers this ability today. For instance, Securitize Capital offers investors a variety of cryptocurrency yield products and Securitize Markets2 offers access to alternative assets, which have traditionally had a low correlation with the stock market. Together, these instruments may provide investors with a way to counteract the inflation part of stagflation.3

Should the economy continue to slow, income earned from yield products has the potential to offset the increased price of goods and services. While risks such as a potential lack of liquidity should be taken into account, by using cryptocurrency yield as passive income, investors can focus on earning a living themselves. This way, if the economy slows down, you don’t have to.

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1:

Trading cryptocurrencies carries a high level of risk and may not be suitable for all investors. Anyone wishing to invest should seek his or her own independent financial or professional advice. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

2:

Securitize Markets is an SEC-registered broker-dealer, FINRA member and operator of Securitize Markets ATS, and an SEC-regulated Alternative Trading System (ATS).

3:

Past performance is no guarantee of future results.

Check the background of Securitize Markets on Finra BrokerCheck.

Securities are offered through Securitize Markets, LLC, (“Securitize Markets”) a registered broker-dealer and member FINRA/SIPC. Neither Securitize Markets, nor any of its affiliates provide any investment advice or make any investment recommendations to any persons, ever, and no communication through herein or in any other medium should be construed as such. Securities offered on the Securitize Markets ATS have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Assets listed herein, such as digital assets or tokens using blockchain, are speculative, involve a high degree of risk, are generally illiquid, may have no value, have limited regulatory certainty, are subject to potential market manipulation risks and may expose investors to loss of principal. Investments in private placements, start-up investments in particular, are also speculative and involve a high degree of risk. Investors must be able to afford the loss of their entire investment. Eligibility to buy and sell securities on the Securitize Markets ATS is determined by Securitize Markets in its sole discretion. Offers to sell, or the solicitations of offers to buy any security can only be made through official offering documents that contain important information about risks, fees and expenses associated with the applicable securities available for trading on the Securitize Markets ATS. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed herein, and are encouraged to consult with a financial advisor, attorney, accountant, tax advisors, and any other professional that can help you to understand and assess the risks associated with any investment opportunity. Past performance is not indicative of future results. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided herein or through any references/links herein. Any financial projections or returns shown herein are provided by the issuer of the relevant security and Securitize Markets has not verified the accuracy. Further, there can be no assurance that any valuations provided by issuers are accurate or in agreement with market or industry valuations. Securitize Markets and its affiliates make no representations or warranties as to the accuracy of such information. Securitize Markets may collect certain information about you that helps us comply with various securities regulations and rules and the USA PATRIOT Act, a Federal law that requires all securities firms to obtain, verify, and record information that identifies each applicant. The information also helps us more fully understand your investment profile and identify what types of investments or strategies may be suitable for you. The term “Investors” used on this website, typically refers to accredited investors where applicable. Please note: if we cannot verify the information you provide, we may be required to restrict or deny your account. Trading during Extended Hours Trading Sessions carries unique risks, such as greater price volatility, lower liquidity, wider bid/ask spreads, and less market visibility, and may not be appropriate for all investors. There is no guarantee that a diversified portfolio will enhance overall returns, outperform a non-diversified portfolio, or prevent against loss. By accessing this site and any pages thereof, you agree to be bound by our Terms of Service and Privacy Policy.