Ways you can protect your income against rising living costs include:
- Invest and maintain investments in the key businesses and sectors of the economy (both in Australia and internationally) who generate and sell the products we commonly buy and consume.
- Stay the course and invest regularly. This may include investing new savings or reinvesting surplus income from investments to maintain your benchmark asset mix. Holding excess cash in deposits may feel secure but the reality is term deposits don’t keep up with inflation.
- Cash rates of return have fallen >50% from high’s in 2007. This is good news for borrowers but not so for retirees.
- Investors in the largest 300 companies on the ASX have received a total return of 78% since January 2003 (including the GFC).
- Investors in the largest 500 companies on the New York Exchange have received a total return of over 100% since January 2003 (including the GFC and before currency movement).
Source Yahoo Finance. Chart compares capital value of top 200ASX companies to the top 500 companies on the NY exchange. This does not include dividends.