Should you take more risk to combat Inflation?

Should you take more risk to combat Inflation?

by Aurora Financial — Posted on September 30, 2021

Inflation chips away at the real value of savings and investments, meaning you need higher returns for your money to keep the same purchasing power.

Risks in stock markets are increasing, but this has not stopped or discouraged investors ploughing into global funds at a record rate in the first half of 2021. 

New sales data from EPFR (quoted in the Financial Times) show a net $580bn flowing into global funds in the first six months of the year, putting it on track to take in more in 2021 than in the previous 20 years combined.  This rush together with the easing of Covid restrictions has helped push the markets higher this year (S&P 500 is up more than 15% so far in 2021, FTSE All World index up more than 12%).

Part of this increase is due to TINA (There Is No Alternative) due to the low interest rates and very limited other options that investors have for REAL returns from other assets.  

You should contact your financial adviser to discuss the acceptable level of risk you’re willing to take to achieve your goals & combat higher inflation.