Inflation is one of the most repeated words in recent months in Spain. This is the process of price increases in a country, which is sustained -maintains over a period of time- and generalized -affects a significant number of goods and services-. Specifically, the Spanish CPI calculated by the INE takes into account nearly 210,000 prices.
In July, inflation accelerated to 2.3%, 4 tenths more than in June. With this rebound, inflation leaves behind two consecutive months of moderation, May (3.2%) and June (1.9%), although it is far from the double-digit rates registered in the summer of 2022, partly due to the effect of comparing with a period in which prices were already rising.
These figures will produce all of us since they will lead to a decrease in the purchasing power of money. In other words, the increase in the general level of prices causes money to lose value, since if prices increase a lot, tomorrow we will be able to buy fewer products than today with the same amount of money.
In search of profitability
To avoid losing purchasing power, the goal of savers should be to achieve a return higher than inflation. That is to say, as long as inflation has kept money immovable -under the mattress, as is commonly said- it entails a loss and represents an error for personal finances.
Deposits are a savings product that are often used to make savings profitable. It is a savings product in which the client delivers a specific amount to a financial institution for a time stipulated between both parties and at the agreed maturity, the entity returns the money to the client along with the agreed return.
However, with the 0% interest rate policy that the European Central Bank (ECB) has maintained for years, the returns on bank deposits have also been minimal. After the increases that began a year ago, they have also been increasing the remuneration offered by banks to their clients with savings. When choosing which deposit to contract, among other factors, profitability must be compared with the inflation rate.
An alternative if the profitability offered by banks is insufficient is investment in the stock market. Specifically, savers can deposit their money in companies that they finance through different financial instruments and in return obtain a return thanks to the capital gains obtained from the evolution in the market of the contracted product.
For example, you can invest through shares, the most popular investment product. In this case, in addition, money can be earned through the dividends that companies sometimes decide to distribute among shareholders. Specifically, dividends are the part of the corporate profit that is distributed among the shareholders.
However, when investing in the stock market, the risks involved in this operation must be taken into account. The CNMV warns that “the main risk of equities is the uncertainty about their returns.” In other words, the value of the shares can go up or down with respect to their acquisition value and it is possible not to achieve the expected return and even lose the entire investment.
