HOME - News - Market
 
 
12 April 2022

Inflation ready to devour current accounts

Author: Luigi Campopiano


Inflation hasn't been seen for a long time and instead, here it is, ready to engulf current accounts that have reached over 1,800 billion euros. How do you fight it?

1. By staying invested;

2. Investing in shares;

3. Keeping liquidity to the indispensable minimum.


But how do you manage a financial portfolio when there is inflation and what investment choices should be made?

Investors are naturally concerned about inflation and its negative impact on the purchasing power of their invested wealth. However, its impact can be mitigated by overcoming it or hiding against it.

An academic study examined the relationship between US inflation and the performance of various asset classes over a long period of time (1927-2020). The study shows that the vast majority of asset classes generated positive average returns, except cash.

The results of the study suggest that inflation hedging is not free. The right mix of assets for growth and hedging purposes depend on the objectives and needs of the investor. The good news is that most of the global assets studied have been able to overcome US inflation over the long term: simply staying invested can in itself be an effective long-term solution to inflation problems. The worst choice, even in this case, remains liquidity. Unfortunately, Italians continue to set aside money in current accounts (we are over 1,800 billion euros). A sum that is tempting, because to keep it there, with inflation rising, the game is played by central banks that recover some of the excess debt issued. In conclusion, if before not having a lot of liquidity represented a choice, today, not having it represents a necessity.

Related articles

The major themes influencing the economic landscape, from short to long term, are: price spiral and recession; digitalization and (de)globalization; climate transition and convergence between the...


Four words and four people from history can help investors navigate the uncertainty of financial markets while managing their emotions. We are currently in the midst of a storm caused by rising...


We find ourselves in a new financial world where the same old basic rules apply and where investors' reactions are always the same. 


According to a news release, this new program is in addition to the discount benefits that Mari’s List members receive on uLab products.


The company also outlined a renewed focus on raising business awareness for its clients, designed by its team and key speakers.


Read more

Dentistry Today recently attended a robotic-assisted dental implant procedure performed by Jay Neugarten, DDS, MD, FACS, utilizing the Yomi S robotic guidance s


State funding will create dedicated space for pediatric and adolescent care and improve access for people with disabilities across the lifespan


 
 
 
 

 
 
 
 

Most popular

 
 

Events