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Infaltion

In: Business and Management

Submitted By faisusop84
Words 940
Pages 4
AGF INVES TMENTS

INVES TOR SERIES

Helping you make sense of your investments

The Inflation Effect:
How will it impact you?

Inflation is, in a nutshell, the rate at which the price for goods and services, and therefore the cost of living, rises.
A chief measure of price inflation is the inflation rate, which is the annualized percentage change in a general price index (normally the Consumer Price Index) over time.
Although inflation has been benign over the past several years, it can rise quite dramatically, as the chart below illustrates. For example, in 1981, inflation rose 12% from the previous year.
14%
12%
10%
8%
6%
4%
2%
0%

1972
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Inflation can affect many aspects of our lives, from the cost of food to how much we need to spend on a new car or a new house. Though you may not notice over the short term, inflation can have a substantial negative effect on the value of your purchasing power and of your investment portfolio over the long term.
Investors need to be aware of the risks and know what steps they can take to protect their portfolios from inflationary pressures.

Source: Statistics Canada, December 31, 2013

AGF INVES TMENTS

Inflation is beginning to rise in emerging markets, particularly in Brazil and India, and central banks in many developing countries are attempting to curb inflation by hiking interest rates and other policy measures. Closer to home, inflationary pressures in the U.S. and Canada are relatively insignificant and interest rate hikes will most likely be minimal over the short term. Yet, Canadians cannot avoid a rise in inflation and an

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