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Posts tagged ‘inflation’

Can you invest during inflation?

Inflation is a dreaded word for many people. As the saying goes, “in inflation everything gets more valuable except money”. It can sound the death-knell for the financial position of many individuals. So does it mean that you should not consider investing your money during inflation? Wrong. Planning out some wise strategies can help you with investment opportunities during hard times also. Read on to know how you should go about it.

During inflation, you can consider investing in inflation indexed securities. The other option is treasury inflation protected securities. The reason is that these always move with the inflation, i.e. the investment is not affected by inflation risk. The Treasury inflation protected securities (TIPS) are a good option to consider as these have the backing of the government. The good thing about them is that their par value increases along with inflation but the interest rate is not affected. There are different types of TIPS available and you should seek the best one for yourself, the one that is suitable for your financial position. You can purchase these from the government. Inflation Indexed securities can be purchased in the form of bond and notes. These give the user the advantage of a higher return than the inflation rate if it is held till maturity.

If you are somebody who is planning to buy property during inflation, then the best thing to do is to select the property with fixed mortgages. Buying property with a fixed mortgage protects it against the risks of inflation.

There are a multitude of securities and assets that can protect you against inflation. Gold mining stocks are also a good option to consider. Precious metals are also preferred but gold remains the topmost choice for most of the people.

With so many options to consider, you can very well become confused with which investment option to go for. If you are unsure, then you can seek the advice of a financial advisor who can help you in taking the right investment decision.