If you're over 30, chances are every third conversation you have eventually turned to portfolio performance. Especially in recent months, these dialogues have become increasingly animated. Picture this: Rahul, 37, boasts about having exited equities just in time, locking in a commendable 12% annualised return.
His older friend Vineet, more risk-averse, responds with equal pride about his decade-long loyalty to fixed deposits (FDs), earning a steady 7%—free of market-induced stress. The conversation inevitably veers into a lament about taxation eating into their hard-earned gains.But taxes aren't the only silent force eroding investment returns.
The more insidious thief is inflation.Over the past decade, India’s average annual inflation rate has hovered at 5.2%.
That means Rahul’s impressive 12% nominal return translates into a real return of just 6.8%. Vineet, meanwhile, eked out a mere 1.
8% in real terms. The inflation-adjusted figures across asset classes tell a sobering story:119464497Whether it's equities, bonds, real estate—or even cryptocurrency—inflation is a constant headwind, quietly diluting purchasing power. While inflation has moderated in recent quarters, India’s structural realities—a vast population, a constrained capital base, and significant reliance on imported commodities like crude oil—mean that inflationary pressures are likely to persist.
Add to this a robust domestic consumption story and potential global supply chain disruptions, includ.
