KEEP AN EYE ON INFLATION WHEN YOU INVEST
In this tutorial, we've discussed the concept
of inflation and how it is measured. More importantly,
we've shared how inflation affects your investments in both
bonds and stocks, and how you can hedge against inflation risk if
the need arises.
Inflation can be a serious problem for both bond and
stock investors alike. Fortunately, in the United States we
were blessed with low inflation throughout the 1990s. But
that doesn't mean inflation has gone away, and the potential
for rising inflation is always a possibility. A sound
investor should always assess the future prospects of inflation and
its potential effects on his or her investments.
For more information about protecting your
investments, see our other tutorials on economics and investment
strategies. Click here to learn even more about this topic with the Encyclopedia of Personal Finance™