Prices are soaring everywhere!

Risk Alert

• The Financial world recently woke up to the dramatic news of Global inflation rates touching new highs around the globe. The average inflation rate has almost reached an all-time high of 4.79% across all developing economies including the U.S, Germany, U.K.
• You may be wondering what changed in the last 2 days? Central banks around the world have indicated that they would consider raising interest rates to reduce inflation
• This resulted in ‘not-so-friendly’ global policies which led to significant setbacks over the last two trading days between ( 18 Jan — 19 Jan) due to massive sell-offs on expectations of low earnings this quarter
• It may be prudent to be aware of the fact that your portfolio may see some volatility over the next 12–36 months due to the current Taper risk
• Your main aim should be to allocate to top-quality options with a strong emphasis on underlying Fundamentals (cash flow, Debt service Coverage ratios, etc)
• Debt returns may take time to recover (approx 12–24 months) since yields have been at a 20 month high and you may see the yield curve flattening over the next cycle
• A Rise in inflation has lowered the real rate of return. You can consider investing in funds/instruments that follow a roll-down, barbell or accrual oriented-strategies from the best quality fund houses and management teams

Patience and disciplined allocation are your biggest strengths in the investment journey, and you should continue to remain disciplined investors!