Battle On Inflation
Inflation has been high lately after emerging from a year of being stuck in the house, American consumers are spending more freely. The release of pent-up consumer demand combined with trillions in stimulus spending has investors on edge as they expect prices to rise. On top of this an impending market correction is something many investors are anticipating. This comes because of the COVID delta variant, inflation, and other factors such as how the Feds could be rising interest rates as soon as 2023 – earlier than expected. With all of this, inflation is expected to rise to 3.4% this year, more than the Fed’s prior inflation forecast of 2.4%. You might be wondering how to combat this and continue to invest successfully? Well, although there is no magic trick sometimes looking at what other investors are going can provide a more holistic view of the markets and different investments.
Currently, it appears that investors are combating inflation fears by focusing on portfolio diversification. According to a poll from UBS, a Swiss multinational investment bank, around 50% of investors said they will be adjusting their portfolios because of fears over accelerating inflation in the next 12 months. To diversify, 35% of investors plan to add stocks, 33% intend to buy precious metals and 32% are keen on sustainable investments moving forward. Do you think is an effective strategy for combating inflation? And how will you be protecting your portfolio going forward
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.