Inflation

What is inflation and how does it affect investments?

If the interest rates go up, people struggle to pay their mortgages, car loans, etc. (STRUGGLE)

If this happens, people save more, spend less. (GRUMBLE)

If people spend less (buy less) then the prices should come down...hopefully with time!

If prices come down, people can afford more and therefore spend more. (RELIEF)

When people spend more and buy more, the prices go up as there is a higher demand for stuff...so then the prices go up...and the cycle continues.

As the economy turns from a save mentality to spend more, interest rates go down so people spend even more and businesses need to keep up with supply, so hire more people, make more stuff...until prices go up again along with interest rates...