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What is Inflation and How Does it Affect Your Investments?
Inflation is a crucial economic concept that has far-reaching consequences for investors. In simple terms, inflation refers to the rate at which the general level of prices for goods and services is rising over time, consequently causing a decrease in the purchasing power of money.
This post is originally from my website Portfolio Hub
Understanding inflation is vital for investors because it can directly impact the value and performance of various investment types. In this blog post, we will dive deep into the world of inflation, explore its different aspects, and reveal how it affects various investments such as stocks, bonds, real estate, and commodities.
Understanding Inflation
Before we delve into the impact of inflation on investments, it’s essential to understand what inflation is, its types, and its causes.
Definition of Inflation
Inflation is the continuous increase in the overall price level of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services, which results in a decrease in the purchasing power of money.
