Navigating Rising Prices: Tips for a Robust Investment Portfolio
In the face of rising inflation, investors are seeking strategies to protect and grow their wealth. The Forbes Finance Council, an invitation-only organisation for executives in successful accounting, financial planning, and wealth management firms, offers valuable insights to help navigate these challenging economic times.
Inflation erodes purchasing power over time, making it crucial for investors to stay informed about economic trends and make necessary adjustments to their investment strategy. One such strategy is diversifying geographically, investing in countries with strong growth potential to mitigate the impact of domestic inflation on investments.
Active portfolio management is essential in countering the impact of inflation. This requires regular review and rebalancing to align with financial goals and risk tolerance. Rebalancing a portfolio involves moving investments from non-performing assets to ones that are performing better during inflationary periods.
Real estate often performs well during inflationary periods, providing potential appreciation and steady rental income. Real estate investment trusts (REITs) can generate profits for investors during inflation due to increased rent and property prices. In sectors like consumer goods and utilities, investing in stocks of companies with a history of regular dividends can provide a steady income stream that outpaces inflation.
Investing in commodities and precious metals can be profitable during inflationary times. These assets often serve as a hedge against inflation, maintaining or increasing their value as the cost of goods and services rises.
A lesser-known strategy is investing in Treasury inflation-protected securities (TIPS). These are government bonds that adjust based on changes in the consumer price index (CPI), providing a hedge against inflation.
The Federal Reserve's target rate of 2% has not been attainable yet, and inflation rates have dropped from 9.1% in 2022 to 2.8% in February 2025. However, tariffs and subsequent price rises are expected to increase inflation figures in the future.
Prasanna Kumar, the Founder and CEO of FinloTax, emphasises the importance of building a resilient portfolio of investments to preserve wealth and achieve long-term financial success during inflation. By following the advice of the Forbes Finance Council and implementing these strategies, investors can navigate the challenges of inflation and secure their financial future.
Membership in the Forbes Finance Council is highly selective, with qualifications focusing on senior-level financial leadership with a strong record of professional success and business impact, alongside acceptance by a professional review panel. This ensures that the council comprises some of the most influential and knowledgeable figures in the financial industry.
In summary, by diversifying geographically, actively managing portfolios, investing in real estate, commodities, precious metals, and TIPS, and staying informed about economic trends, investors can mitigate the impact of inflation on their investments and secure their financial future.
Prasanna Kumar, the Founder and CEO of FinloTax, follows the guidance of the Forbes Finance Council to protect and grow his wealth in the face of rising inflation. He diversifies his investments geographically, investing in countries with strong growth potential.
To further secure his personal-finance, Prasanna also invests in a variety of assets that perform well during inflation, including real estate, commodities, precious metals, and Treasury inflation-protected securities (TIPS).
