#inflation the general increase in prices and fall in purchasing power of money, is on the rise. In this ‘How to invest’ episode, Hannah Wise explains the basics of inflation, the impact is has on different asset classes, and what investors can do to maintain their purchasing power.

Inflation is a way of measuring the change in price of everyday goods and services.
Rising inflation has a negative effect on the returns of #equities and #bonds. It also devalues cash.
Investing in high-quality companies selling essential goods and services as well as buying safer government bonds is a solid strategy in inflationary environments.

We’ve all noticed that the cost of everyday goods and services has been rising more rapidly than at any time in the last twenty-five years. The conflict in Eastern Europe has disrupted supply chains and energy provision, leading to an increase in the price of food, fuel and other services. The rate of such price rises is known as inflation.

Watch the full How to Invest video series:

See more Insights from Julius Baer:

Follow Julius Baer:

– Corporate Website:
– YouTube:
– LinkedIn:
– Twitter:
– Facebook:
– Instagram:

CHAPTERS
00:00 Intro
00:31 What is inflation?
04:42 Equities
06:36 Fixed income
08:34 Impact on wealth and cash
10:55 Quick summary

About Julius Baer

Julius Baer is the international reference in wealth management, based on a solid Swiss heritage.
The story of Julius Baer began over 135 years ago with the vision of one man. In the 1890s the company’s founder and namesake, Julius Bär, established himself as a young and promising banker on Zurich’s famous Bahnhofstrasse….(read more)

LEARN ABOUT: Investing During Inflation

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing

Inflation is a term that refers to the increase in prices of goods and services over time. It is a natural economic phenomenon that affects all aspects of the economy, including investments. Investors must be aware of how inflation can impact their investments and take appropriate steps to protect their portfolios.

One of the most significant impacts of inflation on investments is the decrease in purchasing power. As prices rise, the value of money decreases, meaning that investors will need more money to purchase the same amount of goods and services. This can erode the real value of a portfolio over time if the investments do not keep pace with inflation.

Inflation can also affect the returns on investments. For example, if an investor holds onto a fixed-rate bond or savings account that pays a set interest rate, the real return on the investment will decrease as inflation rises. This is because the money earned from the investment will not be able to buy as much as it could before. Inflation can eat into returns and erode the value of the investment.

Some investments are more susceptible to inflation than others. For example, stocks tend to perform well during periods of inflation as companies can pass on higher prices to consumers and increase their profits. Real estate investments can also be a good hedge against inflation as property values tend to rise with inflation over time. Commodities such as gold and oil can also be good investments during inflationary periods as their prices typically rise along with inflation.

Investors can protect their investments from the impact of inflation by diversifying their portfolio. This means spreading investments across a variety of asset classes that are not directly impacted by inflation. For example, investing in stocks, real estate, commodities, and bonds can help mitigate the effects of inflation on a portfolio. Additionally, investors can consider investing in inflation-protected securities such as Treasury Inflation-Protected Securities (TIPS) that adjust their returns based on changes in inflation.

It is essential for investors to monitor inflation rates and adjust their investment strategy accordingly. By staying informed about economic indicators and trends, investors can make informed decisions about their investments and protect their portfolios from the impact of inflation. Seeking guidance from a financial advisor can also help investors navigate the complexities of inflation and make sound investment choices.

In conclusion, inflation can have a significant impact on investments by eroding purchasing power and reducing real returns. Investors must be proactive in protecting their portfolios from the effects of inflation by diversifying their investments and staying informed about economic trends. By taking appropriate steps, investors can ensure that their investments continue to grow and outpace inflation over time.