Expats urged to revise portfolios as inflation bites

Red hot inflation is causing a cost of living crisis around the world. In the U.S., UK and Germany, inflation has risen to the highest rate for 40 years. Consumer price growth has even begun surging across Asia, a region that until recently had largely been able to avoid the wider global trend. Inflation in Latin America’s largest economies is the highest it’s been in 15 years; the overall rate in Sub-Saharan Africa is expected to grow to 12.2% this year; the Netherlands this year nearly tripled to 9.2%; and Australia’s has doubled to 5.3%. And the global average is currently around a staggering 7.4%. There is much uncertainty amid concerns over inflation, which is forcing central banks to slam the breaks on their economies; the ongoing war in Ukraine, Covid lockdowns in China’s manufacturing heartlands known as the ‘factory of the world’, and some household name companies are posting weak results.

Expats affected

Whilst everyone has been hit by surging prices, it could be argued that expats are disproportionately affected. This is because, amongst other factors, they will be more likely to take international flights which have shot up in costs due to the soaring cost of fuel; have to ship belongings around the world, prices of which have gone up 20% this year on average; are likely to be located in areas where food favourites are already relatively costly because they are imported; and have comparatively expensive educational costs to bear . To both protect and grow your wealth during this ongoing bout of inflation, expats are urged to revise their portfolios to ensure they are best-positioned. “For example, exposure to sectors including energy, commodities, pharma and consumer staples with strong branding ability seems sensible in this environment,” says Nigel Green, deVere Group CEO. “As ever, you should remain invested in the market and ensure that your portfolio is diversified. Diversification is key and plays an essential role in managing volatility.

Bear market

The world’s largest financial market, ‘Wall Street’, is now in a bear market – the term used to describe the plummeting of financial markets by 20% or more from their most recent all-time high. But, say experts, long-term investors will be using the downturn as an opportunity. History and recent data teach us that bear markets are usually major opportunities to build wealth for investors who top-up their portfolios with quality stocks at lower prices. The deVere CEO notes: “Despite the panic, bear markets have historically been optimal times to build wealth for savvy investors. However, with the current uncertainty and turbulence in DIY investing or financial planning. To help secure your future financial freedom, seek advice from a pro.”

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