HomeLifestyleInflation wreaked havoc, investors are not getting any place to hide their...

Inflation wreaked havoc, investors are not getting any place to hide their heads

Highlights

With the rapid rise in prices, the safe investment places with the people became less.
The war disrupted supply chains and made food and beverages expensive.
The hike in interest rates broke the trend of making easy money from the markets

New Delhi. Due to inflation, there is a selling environment not only in India but also in the markets around the world. Since the beginning of this year, the signs have not been good for the market. The First Russo-Ukraine War began. After this, the price of crude oil rose. Due to the war, the supply chain was disrupted and food items became expensive. It may have given people an opportunity to make profits for a short period of time, but in the long run, it only hurt the market.

According to a Bloomberg article, the rapid rise in prices made people less safe investment places. Uncertainty in food and energy prices forced the Federal Reserve to take drastic measures. A research by the University of Pennsylvania and the University of Hong Kong has revealed that investments in stocks, bonds, commodities and real estate are at risk whenever core inflation rises suddenly. This study is based on data from 1963-2019.

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First 6 months be better for commodities
“Commodities performed very well in the first half of the year when energy and food inflation was rising faster than core inflation,” said Nikolai Rusanov, a finance professor at the University of Pennsylvania’s Wharton School, who co-authored the research. He added, “But when energy prices started coming down, we saw that the commodities also did not perform well in the broad sense.”

no place to hide
This change adds to the darkness seen in the global financial markets. Global markets have been deeply hurt by central banks this year. The increase in interest rates in view of inflation broke the trend of making easy money from the markets. Whereas the game of making easy money from the market itself had set a new cross for stocks and bonds during Kovid-19. But the sudden change in this move has also made it difficult for investors to hide their heads.

We are on the verge of change
Tun Drasma, portfolio manager at hedge-fund firm Man Group plc, says the market and the world is looking from high inflation to low inflation. He said, “We are on the verge of change. At the same time, Peter Chatwell of Mizuho International Plc says that a sharp rise in core inflation indicates that monetary policy will tighten, which will bring down the prices of many assets in the near future.

Tags: business news, Economy, Fuel Prices Hike, inflation, Share market, stock market

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