A webinar exploring how to allocate resources between cash and investments in a world experiencing inflation and rising interest rates.
11:30 - 12:30
Date: 11 April 2024
In today's increasingly complex financial landscape, investors are confronted with a conundrum: how to allocate their resources between cash and investments in a world experiencing inflation and rising interest rates. This seminar explores the critical considerations for individuals seeking to optimize their financial portfolios in the medium to long term while assessing the impact of these economic variables on expected investment returns.
Understanding the Inflationary Environment Inflation, the persistent increase in the general price level of goods and services, erodes the purchasing power of money. In an inflationary world, holding large sums of cash can lead to a loss of real value over time. Investors need to assess how inflation may affect their financial goals and the necessity of investing in assets that can outpace inflation.
The Role of Interest Rates Interest rates play a pivotal role in investment decisions. When interest rates rise, as they have been recently, the cost of borrowing increases, affecting various sectors of the economy. For investors, higher interest rates can lead to lower bond prices, potentially impacting fixed-income investments. Therefore, it's vital to consider the relationship between interest rates and different asset classes.
Investing for Growth and Income Investors often have varying objectives, including seeking capital appreciation (growth) or generating regular income from their investments. The recent rise in interest rates has implications for both strategies.
In conclusion, the recent surge in interest rates in an inflationary world presents challenges and opportunities for investors. The path to financial success lies in understanding the evolving economic environment, aligning investment strategies with personal goals, and maintaining a disciplined, long-term approach. By staying informed and adaptable, investors can better navigate the intricacies of the financial markets, potentially achieving their desired returns in the face of uncertainty.
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London-born Nigel Green is the founder and CEO of deVere Group. Following in his father’s footsteps, he entered the financial services industry as a young adult. After working in the sector for 15 years in London, he subsequently spent several years operating within the international space, before launching deVere Group in 2002 with a single office in Hong Kong. Today, deVere is one of the world’s largest independent financial advisory, asset management, and fintech organizations doing business in 100 countries and with more than $12bn under advisement. The company offers global financial solutions to international, local mass affluent, and high-net-worth clients. The Group of companies now comprises of 100+ legal entities.
Matthew Lamb is the Chief Executive Officer of Pacific Asset Management. Prior to joining Pacific, Matthew was Managing Director and Global Head of Liquid Alternatives at Deutsche Asset Management.