How Should You Manage a Portfolio in Times of Inflation?

At an eight-year high, consumer price inflation (CPI) was recorded at 7.79% in April. Inflation is an effect of economic growth, but high inflation causes a slowdown of economic growth.
How Should You Manage a Portfolio in Times of Inflation?

What’s Happening?

Certain commodities’ prices have increased in the last few months, or the amount of goods in packaged items has decreased. Continuous inflation reduces the purchasing power, leading to a decline in demand for goods and services. Currently, equities are in a volatile mood, while fixed income instruments have turned negative due to spiralling yields. Amidst all the chaos, here’s where you can invest:

Liquid mutual funds are the best option for investors these days as they are debt funds that are kept for short periods.

Gold is the next best investment option as it’s a hard asset that could go toe-to-toe with inflation and hold its value over time. Unlike money, which policymakers can create out of thin air, gold requires immense time, energy and cash. This keeps supply in check.

Another best investment option is equities, but the trick here is to chase themes that will do good in the future. In a high inflation scenario, sectors such as information technology, finance, and materials tend to do well.

Should Investors Be Worried?

Portfolios take a toll in a high inflationary environment. The best way to remain calm is to diversify your capital in various asset classes – stocks, bonds, gold, real estate etc. That way, you will be less scared about the volatility in the market. Rebalance the portfolio whenever required, and rest assured of the gains.

What Lies Ahead?

The inflationary environment can be eased, but geopolitical events will continue to trigger inflation. The RBI and the government is doing their part by hiking interest rates, cutting fuel tax, cutting import duties and bringing export duties. Despite all these measures, the global effect of inflation will stay and impact the Indian economy.

Teji Mandi Multiplier Portfolio of high quality companies that blends shorter term tactical bets with long term winners Subscription Fee
CAGR
Min. Investment
Teji Mandi Multiplier Portfolio

Teji Mandi Multiplier

A basket of stocks of small and mid-sized public companies. This portfolio holds the potential to secure larger returns in the future as the companies grow.

1Y CAGR

Min. Investment

Subscription Fee

Teji Mandi Flagship A basket of 15-20 long-term and tactical stocks that we regularly rebalance to adjust to the market conditions. Subscription Fee
CAGR
Min. Investment
Teji mandi Flagship portfolio

Teji Mandi Flagship

A basket of 15-20 long-term and tactical stocks that are rebalanced regularly to adjust to the market changes.

1Y CAGR

Min. Investment

Subscription Fee

Recommended Articles

"Register Your Interest"

Already a member ? Log In