Can Stock Investments Resist The Effect Of Inflation?
The Stock Market has been known all over the world to give returns above inflation on a long term basis. For example, N50 invested in PZ in 1973 grew to N150,000 by 1999. This is fantastic growth in absolute terms. But how does the poor purchasing power of Naira (resulting from inflation) affect this example of PZ. Note that N50 in 1973 would have paid 2 months rent for a three bedroom flat in Enugu. Today in 1999, N150,000 would pay 50 months (4yrs) rent in a similar three bedroom flat. This shows that the investment in PZ grew at a rate that beat inflation hands down 25 times over. This is the case with many other quoted companies like Nestle, Cadbury, Mobil, Guinness, Lever brothers etc. Your Adviser will monitor your portfolio to make sure it is growing above inflation.
