When inflation rises, interest rates may also be driven higher, which reduces the value of fixed-income investments, such as bonds. This is because the yield on fixed-income investments is typically fixed at the time of issuance, meaning that as interest rates increase, the real value of that yield decreases. When inflation rises, there is often a direct correlation to a decrease in consumer spending, which in turn impacts the performance of different sectors of the market. During periods of high inflation, consumers may reduce their spending on non-essential goods and services, such as luxury items and entertainment, and instead focus on purchasing necessities, such as food and household items. Overall, while high inflation can create challenges for investors, it’s important to keep in mind that the best approach to investing during inflationary periods will depend on a variety of factors, including an investor’s goals, risk tolerance and time horizon. Offsetting inflation requires a plan Inflation can erode your purchasing power and your timeline for retirement. But it’s what’s in your portfolio that matters when inflation increases. Some sectors outperform in an inflationary environment and, indeed, offer the best hedge against rising costs. That’s why the best advice is to meet with an Investment Advisor from CDSPI Advisory Services Inc. They have the ability assess your finances and suggest strategies that may help offset the risk that inflation poses. Created by dentists, CDSPI is a not - for-profit organization with the sole purpose of arranging programs for the benefit of dentists who are members of CDSPI’s participating provincial and territorial dental associations. The information contained in this article is of a general nature only and should not be considered personal financial, insurance, accounting or tax advice. For specific advice about your situation, please consult with your financial advisor. If you have any questions about your Financial Plan or investment strategy, please contact our Investment Advisors at 1.800.561.9401 or investments@cdspi.com. You can also go online to book a meeting at cdspi.com/book-a-meeting. CDSPI was created over 60 years ago by the dental community with the sole purpose of arranging programs for the benefit of dentists who are members of CDSPI’s member associations. CDSPI is a not-for-profit organization that exclusively serves the dental community with expert advice and investment and insurance solutions. 37 Issue 2 | 2023 | SupportingYour Practice
RkJQdWJsaXNoZXIy OTE5MTI=