Written by contributor: Varun Kumar
As the US is undergoing recession fears, it is uncertain what will happen to the record breaking equity markets. As far as investments are concerned, the DOW has already hit a bottom of about -10% with more pain to go1, same as the S&P. Real estate is also struggling to make new sales as the FED continues to increase interest rates again and again. Unsurprisingly, digital assets like Bitcoin and Ethereum have stumbled almost 50% this year. In this tumbling economic crisis, factors like the war in Ukraine, supply chain disruptions and China’s “zero COVID” policy are further worsening the economy.
In July, inflation was recorded at 8.52%2, slightly lower than the previous month. This time last year, it was recorded at 5.37%. As a result, inflation continues to rise and stock markets are unable to reverse negative performance, causing a capital preservation dilemma.
What is hedging against inflation in an asset?
Hedging against inflation means investing in an asset that beats inflation over time. Hedging, sometimes also known as risk management, can be done by diversifying portfolios with different assets such as real estate, precious metals and other commodities. For example, if you invested in an asset like gold or silver, which typically gives 4% ROI year over year, and if the inflation was 3% in that particular year, you will receive a 1% gain hedging against inflation.
However, emerging alternative assets such as diamonds and precious gems have an edge compared to the standard alternative assets to perform exceptionally well; irrespective of the market conditions.
Emerging Alternative Assets
Alternative assets like real estate and private equity have always been a traditional way of investing to hedge risk, but investments in emerging alternative assets such as precious gems, art, and fine wine are performing even better than traditional alternative investments. More interestingly, investments in diamonds and precious gems are becoming increasingly popular among wealthy and institutional investors. Due to mine closures, supply is extremely scarce causing demand and prices to rise. Furthermore, technology innovations and regulatory developments have made investing in diamonds more accessible to investors of all types through the ability to acquire fractional ownership. LUXUS is at the forefront, being the first fintech platform where investors can buy shares of extremely rare and valuable luxury assets.
Indeed, investing in alternative assets through online investment apps has seen sizable growth in the recent decade due to investors’ interest in portfolio diversification. In these contemporary circumstances, alternative assets, especially diamonds, are proving to be a better path towards hedging against inflation.
The Fine Print
This offering is made in reliance on Regulation A under the Securities Act of 1933. The securities offered are speculative, illiquid, and an investor could lose the entire investment. Investors should read the relevant Offering Circular and consider the risks disclosed therein before investing.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. REGULATION A OFFERINGS ARE SPECULATIVE, ILLIQUID, AND INVOLVE A HIGH DEGREE OF RISK, INCLUDING THE POSSIBLE LOSS OF YOUR ENTIRE INVESTMENT.
LUXUS, through its affiliated entities, is offering securities through the use of an Offering Statement that the Securities and Exchange Commission (‘SEC”) has qualified under Tier II of Regulation A. While the SEC staff reviews certain forms and filings for compliance with disclosure obligations, the SEC does not evaluate the merits of any offering, nor does it determine if any securities offered are “good” investments.
This profile may contain forward-looking statements and information relating to, among other things, the company, its business plan and strategy, and its markets or industry. These statements reflect management’s current views regarding future events based on available information and are subject to risks and uncertainties that could cause the company’s actual results to differ materially.
Investors are cautioned not to place undue reliance on these forward-looking statements as they are meant for illustrative purposes, and they do not represent guarantees of future results, levels of activity, performance, or achievements, all of which cannot be made.
The securities herein offered by this issuer as herein above mentioned are highly speculative, investing in such securities involves significant risk, including possible loss of principal amount of investment.
FROM TIME TO TIME, AFFILIATES OF LUXUS WILL SEEK TO QUALIFY ADDITIONAL SECURITIES UNDER REGULATION A. FOR OFFERINGS THAT HAVE NOT YET BEEN QUALIFIED, NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED AND, IF SENT IN RESPONSE, WILL NOT BE ACCEPTED. NO OFFER TO BUY SECURITIES CAN BE ACCEPTED, AND NO PART OF THE PURCHASE PRICE CAN BE RECEIVED, UNTIL AN OFFERING STATEMENT FILED WITH THE SEC HAS BEEN QUALIFIED BY THE SEC OR UNLESS AS STATED IN THE OFFERING MATERIALS RELATING TO AN INVESTMENT OPPORTUNITY, AS APPLICABLE. ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF ANY KIND, AT ANY TIME BEFORE NOTICE OF ACCEPTANCE GIVEN AFTER THE DATE OF QUALIFICATION BY THE SEC OR AS STATED IN THE OFFERING MATERIALS RELATING TO AN INVESTMENT OPPORTUNITY, AS APPLICABLE. AN INDICATION OF INTEREST INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND.