With a steep market burn out and a long-term effect on individuals earning capacity, industries survival all this is due to not one factor but several underlying contributors which makes the dramatic crash in the financial and economic world, surviving form it is as good as a being given a second chance in life. The after effects and the in-between show up of the impacts of inflation has to ruin effects, well coming out in bits and pieces and again moving on in the industry requires not only the girth and determination, it also the power to survive the risks of inflation in the economy.
What does inflation do?
- reduces the profit margins in the business steeple
- reduces the purchasing power in the economy
- stock markets go in for a crash leaving investors in disbelief and
- reduction in the interest of the bond and securities
From the standpoint of an investor, it is more like surviving a hurricane and continuing to live and manage all kinds of volatility and fluctuations which the financial markets experience. The portfolio effects are the major concern of an investor and the effects could be for a long-term as well as a short-term impact, which the investors have to face owing to the reduction in the purchasing power.
- the US economy has survived even the worst market crashes and has bounced back, though it could be an impact which is there for a long-term, which investor cannot ignore and the power of money does decrease in the long run, even if it is conservatively invested, over a period of time one can see how the bank interest rates have fallen, never rises for the number of deposits one keeps in the bank.
- The bond market was severely hit during the inflationary period and many fail to keep up with the rates as high as the prices to buy them where sky high and selling them was not any more profitable.
- commodities could not be in the main field investment pattern, as they affect the pricing of other goods and services too during the inflationary period
Having said all the effects which could possibly be depicted in small graphs, investors are keen on the long-term investments they have made whether they will be impacted to be redundant during the long term due to the pricing.