CFDs are not futures contracts in and of themselves, but they allow investors to trade the price movements of futures. CFDs do not have pre-determined expiration dates and trade like other assets with buy and sell prices. Is it futures or CFDs? CFDs and futures are two different ways to trade a variety of financial […]
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Investing amid inflation, of course, has the major benefit of preserving the value of your portfolio. The second reason is that you want your savings to continue to increase. It can also lead to diversification, which is always a good idea. Spreading risk over a diverse group of holdings is a tried-and-true strategy of portfolio
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Inflation, or the gradual increase in the price of goods and services over time, has a variety of positive and negative consequences. Inflation reduces purchasing power, or the amount of something that can be bought with money. Because inflation reduces the purchasing power of currency, customers are encouraged to spend and store up on products
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TIPS (Treasury Inflation-Protected Securities) give inflation protection. As assessed by the Consumer Price Index, the principal of a TIPS increases with inflation and falls with deflation. When a TIPS matures, the adjusted principal or the original principal, whichever is greater, is paid to you. TIPS pay a fixed rate of interest twice a year. Because
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When the rate of inflation outpaces the rate of interest generated on a savings or checking account, the investor loses money. In the United States, the Consumer Price Index (CPI) is the most widely used method of calculating inflation. Many people argue that indexing Social Security payments to the Consumer Price Index (CPI) is insufficient.
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The Consumer Price Index (CPI) is a metric that measures the average change in prices paid by urban consumers for a market basket of goods and services over time. There are indexes for the United States and several geographic locations. Price information for a variety of utilities, automotive gasoline, and food goods is also available.
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Gold has long been thought to be a good inflation hedge. In reality, many people have looked to gold as a “alternative currency,” especially in countries where the national currency is depreciating. When their own currency fails, these countries often resort to gold or other strong currencies. Gold is a genuine, tangible asset that, for
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Governments can fight inflation by imposing wage and price limits, but this can lead to a recession and job losses. Governments can also use a contractionary monetary policy to combat inflation by limiting the money supply in an economy by raising interest rates and lowering bond prices. Another measure used by governments to limit inflation
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The difference between the cash price of a commodity and the futures price of that commodity is known as basis in the futures market. The relationship between cash and futures prices influences the value of the contracts used in hedging, thus it’s crucial for portfolio managers and traders to understand. However, the notion can be
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What exactly do economists mean when they talk about investment or company spending? The purchase of stocks and bonds, as well as the trading of financial assets, are not included in the calculation of GDP. It refers to the purchase of new capital goods, such as commercial real estate (such as buildings, factories, and stores),
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