July inflation pegged at 4.90% — highest in three years as per Inquirer.Net
POINTS OF CONCERN:
1. Food prices going up due to weather damage. With the worst of the storm season still to come, we can expect this to become a bigger concern. Government should beef up whatever food-sufficiency program they have. Continuously relying on food imports — especially for RICE is a recipe for disaster.
2. Much like a stock chart, the trend for inflation is clearly pointing up so be prepared for the situation to get worse. How much worse? Well, according to www.tradingeconomics.com our long-term average is 8.89% so malaki pa pwedeng i-akyat nito.
3. Rising inflation will make investing harder unless your income is also growing. If you are an employee on a fixed salary, pag-isipan mo na budget mo. It will most likely require adjusting due to rising prices.
So, while the PSE continuously flirts with the 7k level, don’t lose sight of the bigger picture. There are growing concerns so your investment plan should be modified to take into account the rising prices as well as potential drops in the equity markets. — specifically, any money you WILL need in the next 6 months (Christmas, New Year’s expenses) should already be moved to less volatile instruments.