![\"\"](\"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-content\/uploads\/2022\/02\/screener.gif\" "\\"\\"")
<\/a>\nIronically enough, items such as mobile phones, laptops, and vehicles are more within reach than making the household budget fit. This is primarily due to an unprecedented hike in food prices. According to Parvati Kamble, a cook whose earnings amount to Rs. 4000 thousand a month, \u201cThere was a time I would save up to Rs. 500 a month, but daily expenditure has gone up so much that I am broke before the month is over.\u201d The price rise in onions, potatoes, and milk, amongst other commodities, has no doubt contributed to her monetary woes.<\/p>\n
The case of the onion in particular, has been causing for plenty of hue and cry in the past year. Bad climatic conditions had contributed to the poor produce, and this along with a high demand for onion gave rise to stupendous onion prices that had left the lay person aghast.<\/p>\n
Also, eating out has taken a beating altogether. A frequent restaurant-goer and foodie in the past, Mrs. Anand now prefers to cook and entertain at home. \u201cI\u2019d rather have pot luck at home and spend an evening with friends rather than paying some ridiculous bill at a restaurant. Going out is no longer a satisfactory experience as the pinch on the purse far outweighs any culinary gratification one might aspire for!\u201d<\/p>\n
Let\u2019s understand what actually happens to the economy during times of inflation. Inflation is caused due to increased demand or decreased supply or due to a combination of both. In a bid to control the effects of inflation, RBI hikes interest rates thus attempting to control the situation. However, this has its own side effects, because high inflation and rising interest rates also affect corporate profitability. Higher input costs lead to lesser production, eventually affecting the growth of the economy. The cumulative effects of reduced growth results in lowering the GDP of the country.<\/p>\n
If inflation remains high household budgets is not the only thing that will be affected. In the long run, it is going to adversely affect the common man\u2019s savings which are largely dependent on fixed income instruments.<\/strong> It looks like investors might have to settle for negative returns<\/strong>, considering that inflation rates have been consistently higher than provident fund rates (8.5%), small saving rates (8%), and bank deposit rates (less than 8%). With a grim scenario such as this facing the investor\/common man, the avenue to explore is the stock market. Investing wisely in the stock market and with minimum risk is the common man\u2019s best chance at beating inflation and increasing earnings exponentially. But that is the subject of another article, keep watching this space.<\/p>\n Also, if you want to know about how inflation and how it affects stock prices <\/strong>Click here<\/a>.<\/strong><\/p>\n How to Invest in Stocks Systematically & Succeed?:<\/strong><\/span><\/p>\n