{"id":7740,"date":"2022-11-21T12:05:22","date_gmt":"2022-11-21T01:35:22","guid":{"rendered":"https:\/\/adelaideprivatewealth.com.au\/inflation-what-to-know-and-what-to-do\/"},"modified":"2022-11-21T12:05:22","modified_gmt":"2022-11-21T01:35:22","slug":"inflation-what-to-know-and-what-to-do","status":"publish","type":"post","link":"https:\/\/adelaideprivatewealth.com.au\/inflation-what-to-know-and-what-to-do\/","title":{"rendered":"Inflation \u2013 what to know and what to do"},"content":{"rendered":"
Rising inflation brings about concern for many, but Vanguard\u2019s time-tested investment philosophy\u2014and a long-term focus\u2014can help any investor navigate choppy waters.<\/strong><\/p>\n Inflation happens when prices rise and purchasing power decreases. This can be the result of a simultaneous high demand for and low supply of goods and services. Consumers have money and want to spend it, but since not enough goods are being produced, prices move skyward.<\/p>\n Inflation has been historically low for most of the last 40 years, so the level of inflation we\u2019re experiencing now is unsettling. When inflation increases, interest rates tend to rise, which can cause both bond and share prices to fluctuate. This can be especially challenging for companies as they plan capital expenditures, budgets, and payrolls. For many investors, this could be their first experience with inflation and they may be wondering how to proceed.<\/p>\n In this inflationary environment, as with any period of high uncertainty, investors should reflect on their goals, time horizon, and tolerance for risk. If you determine that you need to make a change after that analysis, you should consider it carefully before making any sweeping changes (such as switching all your investments to cash). It\u2019s important to put what\u2019s going on into perspective and decide if it truly warrants an adjustment to your portfolio. Oftentimes, a moderate change will suffice. A diversified portfolio will give you the best chance at increasing purchasing power over the long run.<\/p>\n If you don\u2019t think your portfolio needs any modifications but you still want to hedge against inflation risk, you can make spending adjustments. Reducing spending during periods of high inflation can help make your investments last, but won\u2019t feel like a permanent change; you can always increase, decrease, or maintain your spending level, depending on your situation and the market environment.<\/p>\n Don\u2019t make adjustments to your portfolio in haste. It\u2019s crucial that you take time to think about what makes the most sense for you and your long-term needs. Even if your risk tolerance has changed, your asset allocation shouldn\u2019t change that much. We also discourage spontaneous changes based on hearsay; just because someone on the news or online makes a recommendation doesn\u2019t mean it\u2019s right for your portfolio.<\/p>\n Instead of veering to avoid bumps in the road, we recommend you stay the course and focus on your long-term goals\u2014your future will thank you for it.<\/p>\n Speak to us today on [phone] if you would like to discuss how inflation may impact your portfolio.<\/p>\n Source: Vanguard<\/a><\/span><\/p>\n Reproduced with permission of Vanguard Investments Australia Ltd<\/p>\n Vanguard Investments Australia Ltd (ABN 72 072 881 086 \/ AFS Licence 227263) is the product issuer. We have not taken yours and your clients\u2019 circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our\u00a0PDS\u00a0or\u00a0Prospectus\u00a0online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.<\/p>\n \u00a9 2022 Vanguard Investments Australia Ltd. All rights reserved.<\/p>\n Important: The post Inflation \u2013 what to know and what to do<\/a> appeared first on MLC Contemporary<\/a>.<\/p>\n<\/div>\nWhat is inflation?<\/h3>\n
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How has inflation affected the markets?<\/h3>\n
When should I make a portfolio adjustment during high inflation?<\/h3>\n
When should I NOT make a portfolio adjustment during high inflation?<\/h3>\n
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