Tips for Dealing with Stagflation

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Some finance people are calling the current state of the US economy a time of stagflation: but what is it, and how can we best deal with our finances during this kind of period? Some recent CNN Money tips might help you to deal with economic difficulties and your investments in these times. Being informed and staying prepared is, of course, always half the battle.

1. Understand stagflation: The economy is slowing down, but there is also high inflation - that’s what the experts call stagflation. It’s particularly nasty because unemployment problems could arise yet prices are increasing, so lots of people find themselves in trouble.
2. Stay in the stock market: Don’t be tempted to pull out your share investments during this time, even if their value is falling. You’re usually better off holding on to them and waiting for the market to rise again.
3. Invest in TIPS: Treasury Investment Protected Securities rise according to the rate of inflation so these can be a secure investment in times of stagflation.
4. Be careful with investments in general: There are not so many good ways to invest your hard-earned cash during these times, so make sure you research investment oppportunities carefully before making a decision.

Tags: Finances | security