Inflation is a word that strikes a nerve in a lot of us.

We know inflation is
inevitable, pushing down the value of our dollar, but as individuals we don�t have
any control over it. Inflation can�t be measured by just one product or service,
instead it�s a general increase in the overall price level of goods and services in
the economy. Inflation rates vary from year to year. There are a number of
significant measures of inflation, two of which you likely hear about often are the
Consumer Prices Index (CPI) and the Retail Prices Index (RPI). Such measures look
at those goods and services that we all spend money on, and track the changes in
price of these things over time.
Ads
Facebook� - Official Site
facebook.com
Kumonekta sa Kaibigan, Kapamilya at Kaklase. Gumawa ng Profile Ngayon!
Free eBooks
www.readingfanatic.com
Download 1000's of Free eBooks, Get Reviews & More! Get App
Free Bible Download
www.dailybibleguide.com
Find Daily Quotes, Choose Passages & More w/ Free Bible Toolbar!

Money Investment Plans

Investment Adviser
Money Management
Financial Planning Advice
Invest Money

Examples of Inflation in Our Day-To-Day Lives

If you�re concerned about inflation, you�re not alone. People of all ages are
worried about inflation, particularly retirees who are nervous about outliving
their money.

There are a lot of different ideas out there from stock market experts about how to
beat inflation. Here�s a school of thought that I like: if you�re worried about
inflation, then own companies that sell items that tend to inflate in price. Just
think about how many times you�ve said to yourself, �wow, the price for xxx has
gone up.� Or, �I can�t believe how expensive xxx has gotten!� I bet that you can
think of a laundry list of goods and services that you�ve said that about even over
the course of the past week. Take for example the following real world areas of
spending:

*Gasoline Prices: At the time of this posting, oil prices are going down, but
generally we have seen an increase in the prices we pay at the pump.

*Travel Expenses: These expenses may include hotels, airline tickets, rental cars,
etc.
Ads
Business Opportunity
www.hktdc.com
Connect with over 120,000 suppliers from Hong Kong, China and Taiwan
1 Year Online MBA Rs.7500
www.nibmglobal.com/Online-MBA
100% 1 Year Online MBA. Approved & Accredited By IAO & AACBE. Join Now

*Day-To-Day Transportation Costs: For example, the cost of cars and insurance.

*Energy Costs: Associated with these costs is air conditioning in the summer and
heat in the winter, just to name a couple of areas.
*Medical Care: Medical coverage in the form of prescriptions, drugs, visits to the
doctor, in addition to healthcare insurance.

*Recreation: This may include anything from the cost of your cable TV or your
internet provider, to movie tickets to the cost of food and drinks at sporting
events.

*Housing: The costs associated with buying a house or piece of property, or even
renting a house. Also included in this are fees associated with refurbishing,
renovating, and decorating.

*Groceries and Food: This includes grocery prices at big chain grocery stores as
well as the smaller, natural food based grocers. Restaurants are included in this
category as well

How Can We Beat Inflation?

As I mentioned above, one way to think about beating inflation is to buy the
companies (stocks of the companies) that are directly responsible for providing
these goods and services that tend to inflate in price over time. For example,
let�s look at prices at the pump. Do you own oil companies that are actually
selling to you every time that you fill up your gas tank? Among the big names here
are BP, Chevron, and Exxon. These are all publicly traded companies that make a
profit from increased gasoline prices that you and I are paying every day.

If you are wary of being a one stock investor, I understand. Instead of trying
pick one company or stock involved with a particular business, investors can look
at Exchange Traded Funds (ETFs) which hold various companies in a particular
industry. For example, there�s an Energy Select SPDR ETF (XLE) which holds forty-
three energy related companies. There are other ETFs that hold baskets of stocks
in the telecommunications sector, retail sector, healthcare sector, and many more.

Conclusion

If you, like the millions of others out there, are worried about inflation, you may
want to consider owning the very companies that make the things with inflating
prices. The next time you go to pay a bill, put gas in your car, or purchase
groceries, take note from whom and where you are buying. A hedge against real
world inflation may be looking right at you.