How to beat inflation
MAY 20TH, 2010 By DOMINIC
Savers have been dealt a crippling blow this week with the consumer price index (CPI) official measure of inflation leaping to 3.7% and the Retail Price Index (RPI) rose to a staggering 5.3%. The rise has been attributed to the price increase of women’s clothes, food and excise duty on tobacco.
A significant jump in inflation such as this is terrible news for savers, particularly those who rely on the returns from their invesments to boost their income. Investors are further compromised with the abysmal interest rates on savings accounts. The onus is really now on the individual to research more competitive rates of return to beat inflation. For example, if you’re a higher rate tax payer you would need to find an account paying 6.17% to see any kind of fiscal benefit. Frustratingly, these are few and far between.
As a team we’re really focusing on researching inflation proof investments for our clients such as; structured products, index linked corporate bonds, national savings and cash accounts. It is also not surprising that some equities thrive from inflation such as consumer giants Tesco and utility company BT. A diverse portfolio always remains the key to long term investing.
Inflation is the carbon monoxide of finance, a silent killer which has the ability to gradually wipe you out without much warning. Be pro-active and ask your financial adviser about inflation proof investments. Don’t be caught out.
On a lighter note, we’re hosting our first clay pigeon shoot for our professional connections tomorrow and it looks like it’s going to be an excellent day for it. I’ll report back next week.
Posted in: General Information