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Are You Really Protecting Your Purchasing Power?

www.asymmetricfinance.co

Are You Really Protecting Your Purchasing Power?

You need 7.9% a year not to lose money

Apr 13, 2022
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Share this post

Are You Really Protecting Your Purchasing Power?

www.asymmetricfinance.co
Ducado (1483-1488), Portal Fuenterrebollo

For several decades, developed countries have been playing a game in which investment decisions and valuations were made in nominal terms. Inflation was presumed to be negligible and could be eliminated from the analysis.

Official inflation was targeted at 2%. This meant that investors preferred to disregard it without taking into account that over 10 years, this 2% annualized inflation became +20% of purchasing power loss.

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