For questions that relate to inflation, which is the general increase in the prices of goods and services over a period of time.

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5
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2answers
151 views

How does a monthly inflation rate work?

I'm struggling to understand the following inflation numbers for South Africa given here: http://www.tradingeconomics.com/south-africa/inflation-cpi Year Month Inflation 2015 Jun 4.7 2015 Jul ...
2
votes
1answer
30 views

Are there any financial instruments that offer a set real interest rate rather than a set interest rate?

Are there any financial instruments that offer a set real interest rate rather than a set interest rate? For example, an asset structured like this: The asset is purchased at an initial price $P$ and ...
0
votes
2answers
126 views

Investing in the stock market during periods of high inflation

In the past, annual inflation has gone above 7%, which is the canonical average annual rate of return for stocks. When inflation reaches that point again, would be it still be worth investing stocks ...
1
vote
2answers
99 views

Which is more meaningful for individuals - inflation or cost of living adjustment?

I'm helping provide a neutral review of payscale changes at my office (as a non-financial person) and I'm not sure which metric to use when comparing pay raises to financial change. I understand the ...
1
vote
1answer
106 views

How much would I need to save to keep a fixed income consistent?

If you have a fixed income that was going to continue for the rest of your life, what portion would you need to save to keep it consistent? For example, if you were to get 100,000 per year non ...
2
votes
2answers
227 views

Do high interest rates lead to higher bond yields or lower?

Interest rates & bond yields are positively correlated according to this: http://www.investopedia.com/ask/answers/04/031904.asp Thus High interest rates => High bond yields But at the same time, ...
3
votes
1answer
126 views

Inflation adjusted total formula for cost of mortgage

True cost of a mortgage when considering inflation has an answer by a Chris Degnen with the relevant formula(s): adjusted = (p - (1 + inf)^-n*p)/inf; pv = Σ p2 (1 + r2)^-k for k = 1 to n ∴ pv = (p2 ...
1
vote
1answer
88 views

How to reach an apt going against inflation

I live in Argentina and I am 21 years old. One of my goals is to buy an apartment but the problem is the more money I have, the more money I am losing because of inflation. One of the options is to ...
4
votes
1answer
67 views

How do I calculate the modern-day value of pre-euro currencies (inflation correction)

I'm trying to calculate the modern value of 1950's Dutch guldens (guilders). Usually I'd use Wolfram Alpha for such a task, but it doesn't seem to understand pre-euro currencies. This works fine: ...
22
votes
6answers
4k views

What does inflation mean to me?

Everyone buys different kinds of goods. For example I don't smoke tobacco so I'm not affected by increased tobacco prices. I also don't have a car so I'm not affected by the reduced oil prices either. ...
12
votes
3answers
2k views

Least unsafe investment vehicle that meets or exceeds inflation?

Let's say I have an account with $30,000 set aside for long-term unemployment, medical emergency, etc. This account will most likely (and hopefully) remain unused for at least 5-10 years. I could ...
2
votes
2answers
54 views

Calculating an annual inflation rate from monthly data

Let's say I have the following inflation data (for 11 months): "2015-01" = 3.85 "2015-02" = 2.22 "2015-03" = 1.21 "2015-04" = 0.46 "2015-05" = 0.35 "2015-06" = 0.19 "2015-07" = 0.80 "2015-08" = 0.35 ...
1
vote
2answers
98 views

Why compare asset performance using returns, instead of using change factors?

Why do investors compare the returns of assets as opposed to the change factors of assets? E.g. comparing 6% / 4% instead of 106% / 104% to get the comparative performance of two assets. AFAIK ...
5
votes
1answer
145 views

Why adjust for inflation annually, as opposed to realising it after the holding period?

Why do investors offset their annual returns against inflation, when inflation isn't realised until the end of the holding period (when the investor is actually spending the money)? An example: ...
0
votes
3answers
95 views

Why do I not see goods and services all change their price when inflation is high? [closed]

It seems like they would lose money on their goods and services.
3
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2answers
82 views

Adjusting a value for inflation each month using rolling 12-monthly inflation figures

I have a figure that I want to adjust for inflation each month. I have monthly values for the UK Consumer Price Index but these are each for the change over the preceding 12 months. If my base value ...
3
votes
2answers
125 views

How does inflation rate affect debt payoff strategy?

When reading a comment by user Philipp on this answer, he states: [W]hen the debt is in a currency which has an average inflation rate larger than the interest [in this case 0%], you essentially ...
1
vote
1answer
50 views

Determining annual inflation rate from bimonthly cpi growth rate?

I've been unable to find a concrete answer to this question so I assume I am overlooking something incredibly simple. In order to determine the real interest rate, I am required to use the nominal ...
8
votes
4answers
2k views

What is inflation?

What do people mean when they say a price is Inflation adjusted ? Like a car costing $100 in 1990 would cost $400 today adjusted to inflation? If I buy a car at $100 today and inflation is 0.5%. What ...
2
votes
1answer
97 views

Calculating the present day value of a future amount?

I'd like to know what my retirement's purchasing power is. I think the best way to do that is to adjust for inflation in reverse, maybe? I know to calculate your future salary with inflation you can ...
0
votes
1answer
308 views

Why does a high inflation strengthen a country's currency? [closed]

A low interest rate increases money supply, which leads to high inflation. Now, how does that high inflation automatically translate into strengthening of the country's currency? If anything, because ...
0
votes
1answer
123 views

calculation of real inflation rate in india?

How can I figure out the real rate of inflation in india? If I don't believe CPI as real and practical? We get the CPI numbers as inflation rate, but in my views those numbers are not the real one. I ...
0
votes
1answer
45 views

Always invest in a bond ETF with at least inflation protection?

I abbreviate: inflation-protected bonds = IPB (I choose this term because I don't want to limit this question to US TIPS); yield to maturity = YTM. Whenever deciding to invest in a bond ETF, should ...
8
votes
1answer
518 views

True cost of a mortgage when considering inflation

For the purposes of this question, let's assume the following: Inflation is and will be a steady 2% I am in the 30% tax bracket and there is a home mortgage interest deduction I have a 30-year fixed ...
0
votes
1answer
69 views

Demurrage vs inflation [closed]

Is demurrage and inflation the same? If both are at 1% a day and today I have $100, tomorrow: - Under demurrage I'll have $99 - Under inflation I'll have $100, but that $100 will be worth only 99 of ...
0
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1answer
49 views

How does agreed value insurance work with inflation?

In an agreed value insurance plan I understand that the number X is the amount that will be paid out upon loss. However I have two questions in regard to this: Upon renewing my policy yearly am I ...
2
votes
1answer
199 views

Inflation & Time value of money

Can anybody explain to me how exactly does inflation erodes away bank savings using the time value concept of money?
0
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2answers
328 views

How would you figure the cost of something in the future including inflation?

Looking for an excel formula that can calculate the cost of something based on a current price that factors in price increases and inflation. For example a plane ticket cost (econ LAX to JFK) in 30 ...
-2
votes
1answer
50 views

How inflation in China makes real exchange rate between China and US to rise? [closed]

I am a bit puzzled about how the rising inflation in China as compared to that in US amkes the Chinese currency to appreciate as per the real exchange rate. I am confused because I read somewhere that ...
5
votes
2answers
686 views

What does inflation actually mean? [duplicate]

Inflation, in the ordinary sense, increase in the prices of goods and services. Some economists say inflation up to 5% is even desirable. Why is this so? When governments struggle to control inflation,...
2
votes
2answers
478 views

Too low interest rate in New Zealand

I came from a country with high interest rates where you can easily find an investment that pays more than inflation, but I moved to New Zealand and was surprised when I saw that the inflation rate is ...
3
votes
1answer
124 views

Weightage of products used for measuring inflation

How does the government fix a particular weightage for a particular commodity which is to be used during measurement of inflation? Is there any specific scientific formula that is to be used?
1
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1answer
261 views

What is the future of 401k in terms of stability and reliability?

Let me quote: 7) Your Retirement Plan is For S**t. I don’t care how much you set aside for your 401k. It’s over. The whole myth of savings is gone. Inflation will carve out the bulk of your ...
2
votes
4answers
1k views

How to calculate cash loss over time?

For example, I got £100 few months ago and I didn't spend them - just kept them in my drawer at home. I understand that those £100 from few months ago is not worth same £100 but it is less today. How ...
1
vote
2answers
108 views

What numbers do I look at to adjust my salary increases for inflation?

I would like to compare my annual salary increases to some "real world purchasing power" metric to see if I am meeting, exceeding, or falling behind on how far my money goes each year. What number ...
0
votes
2answers
70 views

Does inflation equal more loans? [closed]

I am wondering if the banks are favored by high inflation levels? Do higher inflation levels equal more loans? I am looking for another way of looking at the problems of inflation and not just from a ...
3
votes
1answer
163 views

According to yahoo finance, Vanguard's Dividend Growth Fund does not appear to have dividend growth. Why is that?

Why does Vanguard's Dividend Growth Fund not show dividend growth according to yahoo finance's historical distribution data? In 1993, Vanguard's Dividend Growth Fund Investor shares (from here on out ...
2
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1answer
168 views

Making Sense Of This Sentence

Some random browsing brought me to the Wikipedia page on Financial Independence, and I'm having trouble making sense of something it says. Below is the whole extract, provided in full to make it easy ...
2
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4answers
541 views

Relation between inflation rates and interest rates

In Canada, as of the time of writing this question, the: Key interest rate is 1.00% (source) The inflation rate is 1.50% (source) In India, at the time of writing, the: Base interest rate is 8....
6
votes
1answer
350 views

Is the Social Security delayed benefit increase in addition to COLA?

I understand that delaying taking social security from full retirement age (67, based on my birth year) until age 70 results in a 24% increase in the monthly benefit, or 8% per year. Is this amount ...
2
votes
1answer
141 views

What is the numerical relationship between an APY and an inflation rate?

I’m thinking of starting a CD ladder. The rates for CDs are expressed as an annual percentage yield (APY), while the inflation rate is expressed as a percentage per year. How do you convert between ...
3
votes
4answers
550 views

Is investing in housing considered an adequate hedge against inflation?

Does the price of a home or apartment generally increase, at least, with the rate of inflation in the United States? Could such a purchase be viewed as effective protection against inflation?
0
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1answer
139 views

Effect of inflation on stock market [closed]

What is the effect of inflation on stock market activity? Not the effect of inflation to the returns on a particular stock (some stocks may fare well in case of inflation, other stocks may fare badly ...
1
vote
2answers
126 views

Are there any other investing methods I should look into?

I'm looking into long-term investments. So far, I've looked at stocks, mutual funds, IRAs, and 401Ks. I'm 22 and recently begun my first full time job. I know the basics of these investments, ...
3
votes
2answers
425 views

Effect of Quantitative Easing on Price of Bonds

I don't seem to understand the effects of QE. Fed uses open market to purchase long-term government bonds which pushes up the demand for bonds and drives up the price of bonds. However, this ...
1
vote
2answers
102 views

What price index should I consider when saving?

I was wondering if instead of using some official index, I should calculate my own index, putting in the equation all my expenses and calculate how poorer or wealthier I get over the years. Real ...
2
votes
1answer
995 views

Inflation rates to expect over the next 30 years, 401k planning

I am a recent college grad and now a new hire looking to choose 401k options. I am wondering what the general strategy behind choosing a 401k investment rate is. I have been reading Recent graduate ...
3
votes
3answers
5k views

What effect would currency devaluation have on my investments?

I am curious what effect currency devaluation has on the value of my various investments/assets. For instance, I have retirement savings in mutual funds, growth stocks, and bonds. First, let's ...
6
votes
4answers
3k views

How should one account for inflation when planning retirement savings and withdrawals?

Let's say one had a goal of saving $x, in order to live off of (say) 4-5% interest on the principal. How do you then account for inflation? Do you assume some rate and increase how much you would ...
5
votes
1answer
229 views

What are good investments to use as hedges when the Federal Reserve draws down quantitative easing?

Basically I think it is quite obvious that quantitative easing (QE) will be pulled back eventually and countries will start to tighten their monetary policy. When that happens, what kind of assets ...