Macro Indicators are suggesting a change of Era. We have had a long Goldilocks Era (low inflation and low rates) for the past 20 years where everything’s worked really well. Now inflation is surging high in India as well as around the world. There are many reasons for high inflation, supply side issues, Geopolitical tensions and easy money policies of central banks particularly during pandemic. We feel that central banks will prefer tame. Inflation over growth: It means higher interest rates are here to stay. We strongly feel that the peak of inflation is ahead in India rather than behind. RBI’s 6% Inflation target is not rising but will become floor.
Inflation is harmful for the people who are at the bottom of the pandemic particularly middle class and poor people.
WHAT’S THE SOLUTION
- Learn to live below your means. Track our Income and expenses. Be disciplined about your Investments.
- Need to create passive income or cash flow to fight Inflation.
- Asset allocation is key. It's important to stay in both equity and bond and will give great opportunities to invest.
- Balanced Advantage funds or Hybrid funds will do well.
5 Avoid direct stocks investment and trading – losing less is more than earning more. Stay with a mutual fund where experts manage your Investment.
