Rising inflation levels around the world have spurred market watchers to advise consumers that one of the best things to do now is to start investing. The way Ray Dalio of Bridgewater Associates sees it, “cash is not a safe investment”. “It is not a safe place because it will be taxed by inflation,” the founder of the world’s largest hedge fund explained in a Nov 30 interview with CNBC’s Squawk Box programme. He went on to say that it is critical for investors to have a safe and well-balanced portfolio to get through the turbulent times.
Dalio made the comments as the consumer price index (CPI) in the US hit 6.8% in November, up 0.8 percentage points from the month before. This is the highest the metric has reached in close to 40 years and is treble the 2% target set by the US Federal Reserve Board. Elsewhere, in China, factory-gate inflation hit a 26-year high in October after the producer price index came in at 13.5%. Singapore too saw its highest level of inflation in close to 8 years, as the overall price gauge jumped to 3.2% in October.
With inflation having been around for several quarters, Christopher Brankin, CEO of TD Ameritrade Singapore, does not consider it to be something transitory that will simply revert to the levels it was at previously. A key reason for this is that the increase in prices has been impacting “almost everything” from petrol and food to housing and automobiles. “At this point, inflation has already been impacting people’s pockets. So, I’m in the camp that it is here to stay for a period of time,” Brankin tells The Edge Singapore in a recent interview.
