Global Inflation

Feeling the pinch of all good and commodities becoming costlier? Well, you’re not alone.

Global headwinds such as
Rising Interest rates, the war in Ukraine, supply chain constraints are causing a massive surge in all time inflation levels around the world. Wages are rising at their fastest rate in more than 20 years, but still lag well behind the soaring cost of living.
For example, Regular pay in the UK rose by 5.7% in the year till September, the fastest growth since 2000 excluding the pandemic, when people got big rises returning to work from furlough. However, when adjusted for rising prices, wages fell drastically by 2.7%.

In India, retail inflation (CPI) eased to 6.77% on an annual basis in the month of October, but still remains above the RBI’s comfort bank

Speaking In terms of how this may affect your investments, the next 6 months could continue to be volatile, considering withdrawal of excess liquidity from the system, causing temporary “shocks” in your portfolio.

How can you beat this?

Well, the math is relatively simple. To beat a 7% inflation level, your investments need to deliver atleast 9–12% p.a . However, this is easier said than done. As per our research, equities usually take 3–5 years on average to arrive to the above figures. This is done by investing in businesses with strong fundamentals like underlying earnings, High ROE, Stable cashflow generation, etc.

Need help? Talk to one of our investment counselors for free today to get the latest insights on your portfolio!

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