Inflation is inevitable in market economies, but investors can prepare for it by investing in asset types that outperform the market during periods of high inflation. Keeping inflation-hedged asset classes on your watch list and striking when you see inflation will help your diversified portfolio thrive when inflation strikes. Gold, commodities, various real estate investments, […]
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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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Inflation is defined as a steady rise in the price of goods and services over time. The part of current interest rates that derives from lenders correcting for predicted inflation by raising nominal interest rates is known as an inflation premium. Economists and investors consider actual interest rates to be the nominal (stated) interest rate
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GDP is significant because it provides information on the size and performance of an economy. The pace of increase in real GDP is frequently used as a gauge of the economy’s overall health. An increase in real GDP is viewed as a sign that the economy is performing well in general. What is GDP and
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Scotland’s economy, which includes oil and gas development in Scottish waters, had a nominal gross domestic product (GDP) of $205 billion in 2020. Scotland’s economy has been tightly tied with the economy of the rest of the United Kingdom (UK) since the Acts of Union in 1707, and England has historically been its principal trading
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Most individuals are aware that inflation raises the cost of their food and depreciates the worth of their money. In reality, inflation impacts every aspect of the economy, and it can eat into your investment returns over time. What is inflation? Inflation is the gradual increase in the average cost of goods and services. The
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It’s vital to remember that capital markets, which include bond and stock investors, are mostly forward-looking. This indicates that today’s price change reflects forecasts for future economic situations. Bond prices tend to rise and stock prices tend to fall when investors expect a recession, for example. When the stock market drops, do bonds rise? Bonds
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Austrian economists claim that the Great Depression was a foregone conclusion as a result of the Federal Reserve’s monetary policies in the 1920s. The central bank’s strategy of “loose credit” resulted in an unsustainable credit-fueled boom. During this time, money supply inflation caused an unsustainable boom in asset values (stocks and bonds) as well as
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Sales taxes and other excise taxes are examples of indirect business taxes that businesses collect but are not counted as part of their profits. As a result, indirect business taxes are included in the income approach to computing GDP rather than the spending approach. Does a sales tax boost the economy? An rise in the
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Gross domestic product (GDP) equals private consumption + gross private investment + government investment + government spending + (exports Minus imports). GDP is usually computed using international standards by the country’s official statistical agency. GDP is calculated in the United States by the Bureau of Economic Analysis, which is part of the Commerce Department. The
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