Investment Strategies in times of High Inflation: The Do’s and Don’ts – 5paisa

by | Apr 24, 2023 | Invest During Inflation | 3 comments




In this video, we discussed how to track Inflation, how it affects various asset classes, does it makes sense to invest during high inflation, and what tactics you should use if you invest during the period of high inflation. #inflation #highinflation #investingforbeginners #investingininflation #investmentduringhighinflation #priceindex #5paisa

High Inflation is usually the effect of weak monetary policy. When the money supply becomes excessively large in relation to the size of an economy, the currency’s unit value falls; in other words, its purchasing power falls and prices go up.

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This video covers:
0:00 Introduction
1:30 How to Track Inflation?
2:40 Impact on different Asset Values
5:24 Pros & Cons of Investing during inflation
5:55 1) Advantages
6:29 2) Disadvantages
7:01 Investing Strategies during Inflation
8:46 Quick Summary of the video
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#whatisinflation #inflation #highinflation #whatisinflation #inlfationinhindi #inflationinvestingstrategies #inflationinvesting #consumerpriceindex #investingstrategies
#inflationkyahai

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Inflation is a term that is feared by investors and individuals across the globe. Inflation refers to the rise in the prices of goods and services over a period of time, causing the value of money to decrease. As prices continue to rise, the purchasing power of money decreases, which can have a significant impact on investments. Investing during inflation requires careful consideration and planning to ensure that your investments generate good returns and maintain their value over time.

Do’s of Investing during Inflation:

1. Invest in equities: Equities, especially in sectors like infrastructure, consumer goods, and automobiles tend to perform well during inflation. These sectors experience rising demand and increased revenue during inflation, making them a good investment option.

2. Consider Real Estate: Real estate can be a good investment during inflation, as the value of properties tends to rise with inflation. Real estate investments can provide good returns over time, making them a good option for long-term investments.

3. Invest in Gold: Gold is often considered a safe haven during inflation, as its value tends to rise when the economy is struggling. Investing in gold can be a good way to diversify your portfolio and protect your investments during inflation.

4. Look for Inflation-Linked Bonds: Inflation-linked bonds are a type of bond that adjusts its payout to match inflation rates. These bonds can be a good investment option during inflation because they provide a guaranteed return that is protected from inflation.

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Don’ts of Investing during Inflation:

1. Stay Away from Fixed Income Investments: Fixed income investments like bonds and government securities tend to perform poorly during inflation. As inflation rises, the yield on these investments decreases, making them a poor investment option during inflation.

2. Avoid Keeping too much Cash: Keeping too much cash during inflation can be a poor investment decision, as the value of money tends to decrease during inflation. Instead, consider investing your cash in equities or other investment options that are protected from inflation.

3. Don’t Invest in high-risk investments: High-risk investments like penny stocks and day trading can be risky during inflation. These investments tend to be volatile during inflation, and the risks may outweigh the potential returns.

4. Avoid taking large loans: During inflation, the cost of borrowing increases, making it difficult to repay loans. Avoid taking large loans or investments that require heavy borrowing during inflation.

In Conclusion, investing during inflation requires careful consideration and planning. To make the most of your investment portfolio during inflation, consider investing in equities, real estate, inflation-linked bonds, or gold. Avoid fixed-income investments, cash, high-risk investments, and large loans during inflation. By following these guidelines, you can maximize your investment returns and protect your assets during inflation.

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3 Comments

  1. rhiyans Impex

    If you want reach pan India please give your views in English also

  2. Neeraj Gautam

    Mam aaj toh 10 yr phele B. Comm & 8 yr MBA & M. comm economics ki class main hu esa lga….. 5 paisa & team happy new yr

  3. Subodh Shah

    Well done 5paisa… very well made educational video… keep it up!

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