AskLeo : Can you beat Inflation from Equity Portfolio?

Most of us invest in equity either via mutual funds or stocks because we want to create wealth in the future as well as beat inflation over the long term. But the problem is Equity can beat inflation but there is no surety that your portfolio will beat inflation.


What we have seen in the last 15 years that equity investments do beat the inflation and thus whoever have invested like 15 years back are actually created the wealth but again there is no surety that every one of invested people had beat the inflation. Some might not and that's what the data suggest.

The problem is the inflation number which government shows us is not the reality, the ground reality might be different and then there is lifestyle inflation. So the real inflation can be quite high compared to what is the benchmark. This is the reason getting the right inflation rate is needed and thus we have to beat that inflation rate and not a government-defined inflation rate.

Again if your lifestyle inflation goes higher then your portfolio can beat the equity portfolio can beat inflation but you cannot because now you need more funds for your increased expense because of your lifestyle change. Also, one more aspect can be not getting the desired rate of returns on our investment in the long run and thus because of that your overall corpus will be lower and thus your portfolio has beat the inflation but again that is not sufficient for you.

So in every scenario, we have to be cautious to know that future is uncertain and we have to be ready for any circumstances for it.

  • We can expect a lower rate of returns from equity and thus will target a higher corpus in the future, in this way we can have more money at the end of the goal and thus do not think about how much returns we got. So even if your portfolio will not beat inflation you will have enough money for your goal.
  • Invest in Crypto, this is a sure shot option to beat the inflation
  • Increase investment, yes this is a brainer but again we have to find ways for passive income to increase our income. And the best part is Hive can help it for us.

So can you beat the inflation for your equity investment?

Posted Using LeoFinance Beta