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Rahul Shah on the strategy that should work well in a high inflation environment.
The inflation drumbeat is getting louder by the day.
In fact, US is already facing the heat.
Should we Indians be worried? Is a higher inflation regime finally here and if yes, how do we protect our portfolio against it?
Let us find out in the video.
#HighInflation #Portfolio #Markets
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Inflation is Here. Do this to Protect Your Portfolio | Investing | Rahul Shah
Inflation has become a buzzword in recent months as it continues to rise globally. Inflation is a sustained increase in the price level of goods and services in an economy over a period of time, resulting in a decrease in purchasing power. The increase in global prices has led to many investors worrying about their portfolios.
However, there are ways to protect your investment portfolio during inflation. Here are a few tips to keep in mind.
1. Diversify Your Investments
Diversification is key when it comes to protecting your portfolio. A diversified portfolio reduces the impact of inflation on a particular asset class and helps to spread the risk. By investing across different sectors and asset classes, the impact of inflation can be minimized.
2. Invest in Real Assets
During inflation, the value of paper currency typically decreases. Therefore, investing in real assets such as real estate, commodities, or precious metals can act as a hedge against inflation. These assets generally appreciate in value during high inflation periods.
3. Focus on High-Quality Stocks
Investing in high-quality stocks that have strong fundamentals and a consistent history of paying dividends can help protect your portfolio from inflation. These stocks tend to weather economic downturns more effectively and are less likely to be negatively impacted by rising inflation.
4. Consider Inflation-Protected Securities
Inflation-protected securities (IPS) are government-issued bonds that provide protection against inflation. These securities are linked to the Consumer Price Index (CPI), and the principal and interest payments increase with inflation.
5. Invest in Emerging Markets
Emerging markets often do well during periods of rising inflation. These developing economies have lower levels of debt and are not as reliant on exports as developed nations. Investing in emerging markets via mutual funds or exchange-traded funds (ETFs) may provide protection against inflation.
In conclusion, investing during inflation can be tricky, but by following the tips above, investors can protect their portfolios from inflation. Diversification, investing in real assets, focusing on high-quality stocks, considering inflation-protected securities, and investing in emerging markets can all be tools for safeguarding your investments. By staying informed and educated on market trends, investors can continue to grow a healthy portfolio and weather economic storms.
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6% x2 and add a few more % points. Inflation is here and it won't go away for a long time despite deflationary innovation that is happening. You can't shut down the world and print lots of money for two years and not pay ultimate price.
Superb analysis
it is good strategy but deploying all 50% at one go will be an issue , if someone hasn't invested or invested less than 50% .. then need to scale up gradually over a period of 1-2 years ..
A very pragmatic approach in regard to financial market exposure in a cautious way- the balanced view is highly laudable!
Inflation in India also last 3 months to raised..what control cement, iron and vegetable lot all consumption items increases..cement 345 rupees to 420 now ..Next big crash is waiting
Market always work forward looking earning prospects , not the current economy situation.
I agree with the fact that to beat inflation equity investment is best tool (over the long period horizon)
You can't have relatable trend of inflation and stock market performance at any time.
Looking at the inflation may rise in coming month put your money in equity is also a foolish idea.
In short, equity is the best investment tool to overcome inflation challenge and protect you savings and capital over the long term (min 5-7 years)
We're given the data in the span of 4 years while it doesn't matters if it gives a change in the market by the commodity prices but it'll surely effect by the sentiment for a smaller time frame
What a nice balanced view, Sir! This is really really good for the long term life time strategy!
25% Fixed Assets like Land/farm
25% In Govt Bonds
25% Private Bonds
25% Equity (15 % Index funds + 10% in Stocks)
I was planning to invest heavily in a few select low PE/PB stocks in the PSU banks, power sector and infra which seem to have growth story. Can we take a higher exposure in stocks this way? I do not understand bonds too well.
Good presentation. Toggling inhibits the compounding potential and assumes one is able identify the right timing. Does the performance of dynamic balanced funds show decent, low deviation, consistent growth better than being in an index over the longer term?
Was told by a manufacturer that inputs prices have increased 20+%. Soda ash, coal, FO….
The Indian equity market might as well gets used to these western influences. It should not be a cause of concern for long term investors.
THX FOR VALUABLE ADVICE.
Perfect suggestions for current market scenario.