03 August, 2021

What Are Your Options Now?

What Are Your Options Now?
Bank deposits or fixed-income investments: At present, the favourite of the investor as it gives a comfort level that their capital is intact and they get a fixed return on investment. But investors miss out on one very important factor—inflation. They derive safety in fixed-income investments, harbouring the illusion that capital remains intact even after 2-3 years. That may be the case, but if inflation is taken into consideration, the purchasing power of the same amount of money will be highly eroded in times to come. Why is that so? Every government is pumping in money to revive the economy and this has led to too much money in the markets. Although at present inflation continues to show a downward trend, I'm not confident about inflation being in control in future. The effect of all these bailouts is bound to increase inflation in future. When that happens, bank deposits and fixed income investments would take the biggest hit.

Gold: Now, if one believes in the security gold would offer, which it has in tough times, the mistake would be buying gold when...

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