If the rate of inflation is higher than the rate of return on investments, money invested today will be worth less several years from now.
The possibility that the value of assets or income will decrease as inflation shrinks the purchasing power of a currency. see also risk, inflation hedge, purchasing power risk.
The possibility that increases in the cost of living will reduce or eliminate the returns on a particular investment.
The risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the value of a Fund's assets, and the value of the Fund's distributions, can decline.
The greatest risk investors face over the long term. Investors who opt for conservative savings vehicles for long periods of time run the risk of losing asset value relative to the cost of living. In other words, the dollars you save today will have less buying power a decade from now. If your savings and investment choices do not provide enough growth opportunity to overcome this loss of buying power, your savings will gradually lose value. For more on this topic, see our Seminar entitled Smart Investing: Step By Step.
The risk that the average price level of goods and services will increase during a specified period.
The risk associated with the return from an investment not being offset by the loss in purchasing power as a result of inflation.
The risk that inflation will erode the value of an investment. Investments with low expected returns have more inflation risk than investments that generally have higher expected returns.
A risk of investing in fixed income instruments is the threat of inflation. The bond market reacts strongly not only to actual inflation, but also to the threat of inflation. A report that the economy is gaining strength and unemployment is falling can cause bond prices to fall and yields to rise. The reason for this is that investors who buy and hold bonds or other fixed income investments may be looking at a term of 10 years before receiving the principal amount invested. If there is a high rate of inflation during this term, then the principal amount to be received will lose purchasing power. Additionally, the steady stream of interest payments the investor is receiving will also be losing purchasing power. To offset this rising general level of prices, investors will expect higher yields on their fixed income investments.
The chance that, over time, your money will lose buying power because of an increase in the cost of goods and services
The chance that the value of assets or income will be diminished as inflation shrinks the value of a currency.
The risk that the purchasing power of an investment, after adjusting for inflation, will be negative.
The risk that rising inflation will diminish the rate of real return an investor will realize over time.
The probability of the value of an asset being eroded on account of inflation.
The risk that an investment will not generate a higher rate of return than the rate of inflation, and that the investment will lose real purchasing value.
The risk that an investment return will not grow in line with inflation.
When putting your portfolio together and when making adjustments and revisions, there is an overriding risk that you must consider in order to maintain or increase your standard of living. Inflation does not touch your principal value, but it does steal your future purchasing power. A portfolio that is intended for longer range needs, but is entirely invested in low risk/low reward investments, can actually provide you with less purchasing power (especially after taxes) at the end of the period than at the beginning, even though you minimized all of the other sources of risk along the way. Always review your results in terms of after-inflation (and after-tax) returns, especially for your long-term objectives (like retirement) which are at the most risk from inflation.
The risk that all or part of an investment's return may be offset by inflation.
chance that the value of assets or of income will be eroded as inflation shrinks the value of a country's currency.
The risk of loss of purchasing power due to the increase in costs over time due to rising prices. Used to capture potential loses not associated with a decrease in the absolute value of the investment but rather a decrease in purchasing power over time.
The risk created by the reduced purchasing power of the dollar; your dollar will purchase fewer goods in the future than it will today.
The risk that the dollar you receive on redemption, will buy less than the dollar you originally invested.
The risk that a bond's cash flow may not keep pace with inflation, eroding purchasing power.
Uncertainty over the future real (after-inflation) value of your investment.
The possibility that the value of assets or income will be eroded by inflation (the rising cost of goods and services). Inflation risk is often mentioned in relation to conservative fixed income funds. While these types of fixed income funds may minimize the possibility of losing principal, they expose an investor to inflation risk.
Synonymous with Purchasing Power Risk.
The risk that the return on your investments will not keep pace with rising consumer prices.
The risk that the real value of your investments, as expressed in constant dollars, will decline because of inflation. Generally, the most conservative investments provide the lowest returns over time and are more prone to inflation risk.
The uncertainty of the future real (after-inflation and -tax) value of an investment
The possibility that increases in the cost of living will reduce or eliminate an investment's real (inflation-adjusted) returns.
The chance that the overall price level will rise so steeply over time that, even if your investments appreciate in nominal terms, they may not appreciate in real terms, i.e., the funds you receive upon selling an investment will have less real purchasing power than the funds you originally invested, even though the nominal amount may be the same or greater.
The risk that a portion of an investment's return may be offset by inflation.
Also called purchasing-power risk, the risk that changes in the real return the investor will realize after adjusting for inflation will be negative.
The risk of the effect that real or anticipated inflation can have on the cash flow of a bond.
The risk that the purchasing power of savings will decrease due to rising prices.
The risk to your savings caused by rising inflation. If inflation rises but interest on your savings doesn't keep up it can reduce the spending power of your money. A £1 coin will always be worth £1, but what you can buy with that coin will reduce with increased inflation.
Inflation risk is the risk that rising prices of goods and services over time, or, generally the cost of living, will decrease the value of the return on investments. Inflation risk is also known as 'purchasing-power risk' since it refers to increased prices of goods and services and a decreased value of cash.
The risk that an investmentâ€™s return may be negatively affected by inflation. arge-cap Stocks: Stocks of larger-sized companies, which are generally considered to be companies whose total outstanding shares are valued at $10 billion or more.
The risk that the rising cost of goods and services will reduce the value of your investment, and your buying power, over time.
The risk that an investment return will not keep up with inflation.