CGWM’s Chief Investment Officer, Michel Perera, discusses the reasons why he thinks inflation is set to be a focus for investors this year.

This is not a recommendation to invest or disinvest in any of the companies, themes or sectors mentioned. They are included for illustrative purposes only.

Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. Past performance is not a reliable indicator of future performance.

The information provided is not to be treated as specific advice. It has no regard for the specific investment objectives, financial situation or needs of any specific person or entity….(read more)

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Inflation has been a hot topic of discussion in the financial world in recent times, and with good reason. As we head into 2022, aiming to beat inflation will be a key investment theme for many investors.

Inflation refers to the rate at which the general level of prices for goods and services is rising, leading to a decrease in the purchasing power of a currency. This means that over time, the same amount of money will buy fewer goods and services. Inflation can erode the value of savings and investments, making it a concern for anyone looking to grow their wealth.

As we enter 2022, inflationary pressures are likely to persist due to a variety of factors, including supply chain disruptions, increased demand for goods and services, and rising input costs. In response to these pressures, central banks around the world have been signaling a shift towards tighter monetary policy, which could have implications for investors.

For investors, the goal is to outpace inflation and grow their wealth over time. However, with traditional safe-haven assets like cash and bonds offering historically low yields, it has become increasingly challenging to achieve this goal. This has led many investors to seek out alternative investments that have the potential to provide higher returns and better protect against inflation.

One such alternative investment is equities. Stocks have historically outperformed inflation, offering the potential for capital appreciation and dividend income. In addition, certain sectors, such as commodities, real estate, and infrastructure, have also been seen as potential hedges against inflation.

Another investment theme that is gaining traction in light of inflation concerns is the focus on real assets. Real assets, such as precious metals, art, and collectibles, have historically maintained their value over time and have the potential to provide a hedge against inflation. Additionally, real estate and infrastructure investments have the potential to generate income and appreciate in value over time.

Furthermore, some investors may look to alternative investment vehicles, such as hedge funds, private equity, and venture capital, which have the potential to generate attractive returns and better protect against inflation.

In conclusion, as we head into 2022, aiming to beat inflation will be a key investment theme for many investors. With inflationary pressures expected to persist and traditional safe-haven assets offering historically low yields, the focus will be on seeking out alternative investments that have the potential to provide higher returns and better protect against inflation. Whether through equities, real assets, or alternative investment vehicles, investors will be looking for opportunities to outpace inflation and grow their wealth in the year ahead.