inflation vs investors

1. Presentation on Inflation’s Hedge
Against Investor’s
Presented By-:
NITISH KUMAR
HIMASNHI
VAIBHAV
MANIKA
SUNNY

2. SYNOPSIS
 Definition
 Types of Inflation
 Effects of Inflation
 Inflation Hedging
 Investment Products
 Gold & Precious Metal
 Real Estate
 Crude oil

3. INFLATION
 Inflation is an increase in prices for goods and services of an
economy over a certain period.
 A general increase in prices and fall in the purchasing value of
money
 Example-:
You buy a candy bar for Rs 50. A month later, you go to buy the
same candy bar and it's Rs 55 . You still have only Rs 55, but the
price of the candy bar has gone up. We can say that inflation is at
work. The price of that bar has been inflated.

6. Types of Inflation’s
(a) DEMAND - PULL INFLATION: In this type of inflation
prices increase results from an excess of demand over supply for the
economy as a whole. Demand inflation occurs when supply cannot
expand any more to meet demand; that is, when critical production
factors are being fully utilized, also called Demand inflation.
(b) COST - PUSH INFLATION: In this type of inflation occurs
when general price levels rise owing to rising input costs. In general,
there are three factors that could contribute to Cost-Push inflation:
rising wages, increases in corporate taxes, and imported inflation.
[imported raw or partly-finished goods may become expensive due
to rise in international costs or as a result of depreciation of local
currency ]

7. EFFECTS OF INFLATION
 They add inefficiencies in the market, and make it difficult for
companies to budget or plan long-term.
 Uncertainty about the future purchasing power of money
discourages investment and saving.
 There can also be negative impacts to trade from an increased
instability in currency exchange prices caused by
unpredictable inflation.
 Higher income tax rates.
 Inflation rate in the economy is higher than rates in other
countries; this will increase imports and reduce exports,
leading to a deficit in the balance of trade.

8. An investment that is considered to provide protection
against the decreased value of a currency. An inflation
hedge typically involves investing in an asset that is
expected to maintain or increase its value over a specified
period of time. Alternatively, the hedge could involve
taking a higher position in assets which may decrease in
value less rapidly than the value of the currency.
Inflation Hedging

9. Following types of investment product-:
1.Gold & Precious Metals
2. Real Estate.
3. Crude oil.
4. Mutual Fund
5. Fixed Deposits
Investments Product

10. Gold is widely viewed as an inflation hedge - a reliable
measure of protection against purchasing power risk.
While precious metals in general are a solid bet, gold in
particular is seen as a hedge against uncertainty and a
store of value.
GOLD AS INFLATION HEDGE