Warning from Özgür Demirtaş: 8 dangers awaiting investors against high inflation

Drawing attention to the mistakes investors frequently make in high-inflation environments, economist Prof. Dr. Özgür Demirtaş explained point by point how investors should develop conscious strategies to protect themselves against inflation. Emphasizing that investors must act consciously during periods of high inflation, Demirtaş stated, "Investing in an inflationary environment requires a careful strategy. Avoiding mistakes and choosing the right investment vehicles is critical for financial success."

PAY ATTENTION TO THESE WARNINGS

Emphasizing that investors must fully understand the effects of inflation to avoid major losses, Prof. Dr. Demirtaş listed what should not be done as follows:

1- Ignoring the erosion of purchasing power by inflation: A high nominal return on an investment does not mean it provides protection against inflation. Demirtaş emphasized that it is a major mistake for investors to act without considering the real return (return adjusted for inflation).

2- Thinking short-term: Stating that money loses value against inflation, Demirtaş said that it is risky for investors to focus on short-term gains. He pointed out that not preferring assets that provide long-term inflation protection is a major mistake.

3- Over-relying on the local currency: Stating that attention should be paid to fluctuations in exchange rates in countries with high inflation, Demirtaş expressed that keeping all investments in the local currency is risky.

Investing in the wrong assets causes major losses

4- Investing in the wrong assets: Stating that investing in fixed-income securities and sectors negatively affected by inflation can lead to major losses, Demirtaş emphasized that investors should be careful in these areas.

5- Neglecting risk management: Stating that not diversifying the portfolio and investing all capital in a single asset is a major mistake, Demirtaş expressed that investors should create a more balanced portfolio in the face of economic uncertainties.

6- Not using inflation-protected instruments: Stating that inflation-indexed bonds can provide significant advantages to investors in some countries, Demirtaş reminded, however, that these bonds only work in countries where inflation measurement is conducted reliably.

Panic causes investors to lose

7- Panicking and acting hastily: Emphasizing that acting in panic against market fluctuations can cause great harm, Demirtaş stated that investors should make strategic and cool-headed decisions.

8- Not accounting for cost increases: Stating that business owners and entrepreneurs, in particular, should not ignore the effect of inflation on raw materials, labor, and operational costs, Demirtaş expressed that it is of critical importance to calculate costs in accordance with inflation.

News Source: 12punto