What is the impact of inflation on my investments?

What is the impact of inflation on my investments?

Inflation can erode the purchasing power of your investment returns. It means that even if your investments grow, the real value of those gains may be less than expected.

How can I protect my investments from inflation?

You can consider investing in assets that typically outpace inflation, such as stocks, real estate, or inflation-protected securities like TIPS.

Are there specific sectors that perform better during inflation?

Yes, sectors like energy, utilities, and consumer staples often perform better during inflationary periods as they can pass on costs to consumers.

What should I avoid investing in during high inflation?

It's generally wise to avoid long-term bonds, as their fixed interest payments may lose value in real terms during inflation.

Can inflation affect my retirement savings?

Absolutely. If your retirement savings don't grow at a rate that outpaces inflation, you may find that your purchasing power decreases over time.