The consumer price index-inflation for May, which was released last month, climbed up to 6.3 percent. This was the highest in six months. The June inflation print is expected later in this month.
Rising inflation indicates increase in prices of essentials such as food, clothing and house. It also means rise in cost of educating children, as well as healthcare.
If you are invested in certain categories of debt mutual funds, you may also see dip in your returns, as bond yields tend to go up in high-inflation environment.
Your real rate of return might even turn negative, if your investment returns are below inflation rate.
So, what you should be doing in such times?
In this edition of Simply Save Podcast, Moneycontrol’s Jash Kriplani talks to Nisreen Mamaji, founder, MoneyWorks Financial Services, to find out what should be your investment strategy in a high-inflation environment and how inflation can impact investment returns.
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