INSUBCONTINENT EXCLUSIVE:
There are some tangible assets that grow in value as they age such as vintage cars and fine artAs the retail inflation for the month of May
increased to 6.3% from 4.23% in April, most people have started feeling the squeeze on their investments
The rise in retail inflation, measured by the Consumer Price Index (CPI), was mainly on account of a jump in food inflation
A rise in inflation reduces the purchasing power, the ability to buy goods and services
Put simply, rising inflation pushes the cost of living but the return on investment doesn't go up accordingly
Given this fluid situation, what should you do to manage your investments?Here are some investment tools to keep you ahead of
inflation:1.StocksIn general, returns on stocks beat inflation
Consider this, rising prices of goods can mean more profit for companies
Better prices in turn boost share prices
However, there may be instances when it may not be true but over the long term, the stock market has historically provided returns that beat
Equity Mutual FundsFor many investors, monitoring the movement of individual stocks or the market on a daily basis is a task
They can invest in equity mutual funds after choosing a fund that appears to be best suited to fulfil their individual requirements and
expectations.The 5- and 10-year returns of most equity funds have remained usually above 10%.3.GoldTraditionally, Indians have invested in
gold as this did not require them to be market savvy
People consider gold a safe bet against the periodic volatility of stock markets
It is considered a great hedge against inflation because the increase in its prices and the returns thereof have been able to offset
Usually, when inflation rises the demand for gold increases.4.Real EstateThe returns from real estate investments have managed to remain
above inflation rates in India, but they require a huge capital, running into a couple of lakhs or crores
In most cases, investors need to account for the interest they pay on loans they take for buying a property
Since the value of real estate depends highly on the geography of the area, it often yields a better return to beat inflation.5.Alternative
investmentsThere are some tangible assets that grow in value as they age such as vintage cars and fine art
Investing in these assets can work as a hedge against inflation
It is expected that the prices of these collectibles will appreciate over time and provide returns that are greater than the inflation rate
Investing in cryptocurrencies may also protect against inflation because there is a cap on their supply
But they are highly volatile and there's a trust issue with them.
