Did you ever have the need to “tighten your belt” and cut out some luxuries to keep up with the rising cost of living? Instead of buying 4DX movie tickets, you’d rather “Netflix and chill” at home to save on money?

Same concerns can be applied to your investments. But you worry less about rising inflation if you’re investing in companies that own and operate real assets, as these are often inflation-resilient. And that’s what Allianz does!

Our Global Real Assets Dividend Paying Fund help your portfolio thrive when inflation hits by investing in companies that may be less affected by inflation.

Visit allianzpnblife.ph today for more information!…(read more)

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What’s the Impact of Rising Inflation on Your Investments? | Allianz Guru Series | Ep. 05

Inflation is a topic that often weighs heavily on the minds of investors. Its impact on the economy and investments cannot be overlooked, making it an important consideration for anyone looking to grow their wealth. In this article, we delve into the impact of rising inflation on your investments and discuss strategies to mitigate its effects.

Inflation is defined as the increase in the general price level of goods and services in an economy over time. When inflation rises, the purchasing power of money decreases, and as a result, the cost of living increases. This can have a direct impact on your investment returns and the overall value of your portfolio.

One of the major impacts of rising inflation is the erosion of the real rate of return on investments. Let’s take a common investment vehicle like bonds as an example. When inflation rises, the fixed income provided by bonds becomes less valuable. This is because the interest payments on bonds do not increase with inflation. As a result, the real rate of return on bonds decreases, potentially leading to diminished investment value.

Similarly, rising inflation can negatively impact stocks. Companies may experience increased costs of production, which can eat into their profits. In response, they may raise prices on their products or services. This can reduce consumer spending and ultimately affect the stock prices of these companies. Additionally, rising inflation may lead to higher interest rates, making it more expensive for companies to borrow money. This can further impact their profitability and hinder stock market performance.

So, what can investors do to mitigate the impact of rising inflation on their investments?

One strategy is to diversify your portfolio. By allocating your assets across different asset classes, such as stocks, bonds, real estate, and commodities, you can potentially balance the impact of rising inflation. When one asset class is negatively affected, others may perform well, helping to hedge against inflation.

Another strategy is to invest in assets that tend to perform well during inflationary periods. Historically, certain assets like real estate, commodities (such as gold and oil), and inflation-protected securities (such as Treasury Inflation-Protected Securities, or TIPS) have shown resilience during inflationary times. These assets have the potential to retain or even increase in value as inflation rises.

Additionally, investors may choose to hedge against inflation by investing in companies that have pricing power. These are companies that have the ability to pass on increased costs to consumers without significant negative impact on sales. Such companies are usually found in sectors such as utilities, healthcare, and consumer staples.

Lastly, staying informed and regularly reviewing your investment strategy is crucial. Inflation is influenced by various factors such as government policies, economic conditions, and global trends. Keeping on top of these developments can help you adjust your investment strategy accordingly.

In conclusion, rising inflation can have a significant impact on your investments. It is important to understand the potential consequences and implement strategies to mitigate its effects. Diversification, investing in inflation-resistant assets, and staying informed are all key factors in navigating the impact of rising inflation on your investments and securing your financial future.