How does inflation affect secure investments?

Inflation can have an impact on secure investments in different ways. Secure investments such as fixed deposits, savings accounts, and bonds typically offer a fixed interest rate, which means that the return on investment is not affected by inflation. However, the real value of the return may decrease over time as the purchasing power of money declines due to inflation.

On the other hand, inflation can benefit investments in assets such as real estate, stocks, and commodities, as their value tends to rise with inflation. These are generally considered higherrisk investments compared to secure investments.

In order to balance the impact of inflation on their portfolio, investors can consider diversifying their investments across a range of asset classes, including both secure and higherrisk investments. Additionally, investing in assets that are expected to perform well during inflationary periods, such as real estate or stocks in certain industries, can help mitigate the impact of inflation on their portfolio.