Q&A with Apricot: Why Do People Invest? Reason 1: Inflation

“Open a brokerage account and start investing today” is a call to action we and other investment companies often use in our ads. Those new to investing might wonder, but WHY invest at all? Let’s go over the key reasons in our Q&A series.

Reason 1: Beating Inflation

Do you have the feeling that 5 years ago you could buy more with 1000 AMD compared to today ? Well, it’s not a feeling, it’s the effect of inflation: the increase of prices over time.

Today, with 1000 AMD you can buy 2-3 kg of apricot, but in 5 years, the same 1000 AMD might allow you to buy less as it might lose its buying power due to inflation.

Take a look at the inflation chart for Armenia

Source: Armstat

When you save money and keep it in cash or an ordinary bank account, your money will end up losing its buying power over time.

To avoid this, people

• Invest it hoping for it to preserve its buying power and potentially grow over time. Investments have higher potential returns, but are also subject to market fluctuations and carry inherent risks.
• Use Savings Accounts. These offer lower risk, but also lower returns compared to investing.

The goal is to grow the money at a rate that beats or at least matches inflation.

Investing is for everyone

Investing isn’t exclusive to finance experts. Whether you’re an active investor, trader or someone seeking to preserve the value of your money, there are suitable investment options available:

• Active Investors and traders have time and knowledge to track the market and pick individual stocks. They use our built-in tools to aid their research and decision making and can apply for margin trading.
• People with limited time and knowledge in finances might chose investment instruments that offer relativity lower risk and allow them to passively manage their money, such as bonds (for example Armenian governmental bonds*), index funds (like S&P 500*) and other.

Whether you’re a seasoned investor or new to the world of investing, Apricot Capital offers a range of investment opportunities to suit your needs.

Want to learn more about investing? Check out other articles in our Q&A series and our Glossary.

Already interested in starting investing? Open a brokerage account for free with Apricot. No minimum deposit requirement, free yearly servicing, low commissions.

Download our Apricot app from the App Store and Google Play.

It’s important to remember that investments are subject to market fluctuations and carry inherent risks. Consider your financial goals and risk tolerance before investing.

Apricot Capital is regulated by the Central bank of Armenia.

*The examples in this text are for illustrative purposes only. This does not constitute investment advice or a recommendation to buy or sell any specific investment instrument. The past performance mentioned in this text is not indicative of future results.