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 Inflation
- The Effects
Will
you be able to retire in comfort? How much will a stamp or simple litre
of milk cost in 20 years?
 Twenty
years ago, it cost just $5.26 to buy milk, eggs, bread, butter and cereal.
Today, the same bag of groceries could cost you over $11.49.* That's because,
over time, inflation erodes the purchasing power of money.
Inflation is described as a
condition of increasing prices and it has left its mark on everything.
As another comparison, the average price of a car in 1972 was around $3,500
but in 1995 it weighed in at a hefty $18,000...over five times as much.
This time frame included several years of high inflation but even low
rates of inflation over many years will take their toll.
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| Inflation
is one of the evils that will affect your purchasing power over time. |
Now consider the impact of inflation
on your investments. In
order to ensure that your investments meet your retirement needs, they
must deliver a good return beyond the increase in inflation. If you get
caught in the trap of playing it too safe, you run the risk of losing
purchasing power by falling below the inflation rate.
Consider a GIC for example. It
will provide a steady stream of income and protect you from investment
loss but the actual buying power of the GIC principal will constantly
decline due to inflation.
 At
Fiscal Agents, we believe that the best path to successful investing is
a professionally managed, diversified portfolio of mutual funds, guaranteed
investments and insurance products. We understand the concept of inflation
and can help you select the right investments to rise above it.
Model Mix |
Long-Term |
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