Inflation is a fact of life that everyone must deal with. Even when inflation is "low", it gradually takes its toll on your assets.  The result of low inflation is that your purchasing power gradually erodes even though you might have the same amount of money. In order to combat this, you have to earn more or increase the rate of return on your investments. Often a simple savings account won't even pay enough interest to cover the losses due to creeping inflation. In that case, the only way to beat inflation is to take on additional risk to increase your rate of return. Taking on additional risk, however, means that you could suffer other types of losses.  So, in order to properly manage … [Read more...]