Don’t let inflation eat your lunch
The dynamics of investing are back in play as higher interest rates reward income strategies. But if inflation is higher for longer, portfolios will go backwards.
As higher interest rates spread across the world, mortgage holders may be glum but not everyone is sad. Investors who like staid asset classes such as bonds and term deposits are happy to see returns leap higher over the past 10 months. It’s like the old days, when portfolios engineered for income could keep modest lifestyles afloat.
Today, however, there is one big problem: inflation.
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