With longer term cash reserve holdings or investments providing low income, the medium to long term effect of capital erosion is very often ignored.
Present low deposit rates and persistent high core inflation dramatically reduce the purchasing power of your capital over time. The longer you hold cash, the more dramatic the effects. With the present high rates of inflation throughout Europe including the UK to protect your capital can be a real challenge.
To be absolutely clear, in order to beat the current high inflation rates and maintain a positive net rate of return, you have no choice but to take on investment risk.
There is no riskless or guaranteed investment available that will currently beat inflation rates. After all, there are some fundamental investment truths written in stone and one of them is you cannot generate a high rate of return or interest without accepting investment risk!
That said, there are investment options available that offer higher rate of returns or interest above current inflation rates, where the risk is being “professionally managed” and where this can be proven in a transparent way. The usual investment term for these investment vehicles is one or two years providing a short term home for your capital without tying it up over the longer term. You can normally select an income producing or deferred interest variety.
These effective liquidity management solutions are no “black box” investment offerings, but short term asset backed and secured investments with a clear and proven past performance and payout track record based on full transparency and with an underlying investment concept that makes sense and stacks up.
These solutions are exclusively available to certified High Net Worth, Sophisticated and Corporate investors only.