How can you shield yourself from inflation?
Inflation in India was a worrisome factor compared to the overall performance of the Indian economy. Inflation has accelerated to some extent in the last few months due to corona pandemic. Prices of everything from food to apartment rent to gas have skyrocketed. Rising living costs not only affect your cash flow but also reduce your savings. Choose your investment carefully to protect your investment portfolio. A good investment plan delays your future use from price increases.
Here are some pointers to protect you from inflationary losses.
- The first step is to reduce your costs and save a significant portion of your annual income. Cartel splurging urges. Don’t use your credit card in a hurry.
- You decide the rate of inflation based on your plan. The monthly consumer price index for Urban Manual employees should be based on your estimates. Do a little research to get an idea of the inflation trend in the next 6 months. With this in mind, our goal is to invest in tools that earn more than the rate of inflation. Review and revise the inflation rate you assume every year.
- Investing in assets that can change your best bet. Dividends received by investors in equity stocks increase with inflation and respond positively. Equity stocks are also given the opportunity to appreciate capital that can be restrained against inflation. Opt out of betting stocks as the risk percentage is too high. Invest in good stocks that have a good track record and will give you maximum returns in the long run. Buy and hold stocks for the long term as it is a good hedge against inflation.
- Another safe way to protect yourself from inflation is to invest in mutual funds that invest in energy and natural resource companies, oil and gas companies, and precious metals companies. These companies have a good track record and their value is appreciated.
Real estate prices have never appreciated before and so on. So this is an investment where you can never go wrong.
Direct investment in precious metals like gold, silver and platinum is recommended as these are always considered safe investments. Gold has appreciated 49% in the last one year. Prefer gold coins and biscuits over jewelry.
- Invest where inflation-protected bonds / bonds on the capital index are available.
Weighing the pros and cons of various investments and being prudent in making investment decisions.