How Does A Rise In The Rate Of Inflation ⬆️ Affects The Share Market? How? & Why? Find Out Here! (#55)

As we know Share Market keeps on fluctuating over time as we know that it gets affected by certain Economic Factors & as well as the Investors behaviour & actions!

Today; we are talking 'bout a usual Economic Factor & it's impact on Share Market! & the Economic Factor is as we've known from the title : Inflation.... So, lets just start talking abing it....

How A Rise In The Rate Of Inflation Affects Or Impacts Share Market?

But let us first understand....

What Is Inflation? Basic Definition! Inflation refers to an increase in the cost of living.... such as goods & services as the value of every penny decreases!

Also Read: What Is Infaltion?

Now first of, the direct impact Inflation have is on 2 major things the Share Market is kind of made up of.... Companies & Investors!

First off lets talk 'bout Companies....

Now not all Companies are bad performing one's but many Companies do struggle....

Lets talk 'bout the struggling one first....

So the sector that struggles is any such that has a decrease in sales due to Inflation....
Its due to people spending less 'cuz of Infaltion.... & hence, the Company earns less profit....

The Comapny I could think oof as an example is a Car Company.... like why would someone purchase cars for more money, as the prices just went up you know....

But I might be wrong....; Corrcet me if I am! But, like I had no where to be sure of.... as per my research I came up with this example!
What Doe You Think About This?

Anyways so.... let's now talk about the Well Performing Companies now....

The Well Performing Sector is the FMCG one....
& I find it pretty obvious, not gonna lie!

The products of FMCG Companoes are never really that expensive but even if due to Inflation, the prices ever rise up; peopel still would have to keep up with it.... because they cant stop buying stuff from here.
Now, if you are wondering what kind of Companies comes under the FMCG Sector.... than for your kind information.... Companies like Home Services, Meds/Pharmacies & Food Companies, etc., etc., are what comes under FMCG Sector.

Ok! So this was all about the Companies reacting to thr rise in Inflation....

Now, let's take a look at Investors, too....

Investors now react sort of differently some take out their money for their own reaosns while many invests more in FMCG & not in those people may not be buying (just for a while).

Now, Inflation is a simple thing and it indicates an growing Economy if its of a good rate.

So don't worry! Thankfully, things just aren't always that depressing!

I just wanted to point out how things really tend to go....

Lastly....
I may add that.... in general,
Value stocks in Consumer Sector tend to do well during Inflation Than Growth Stocksks

Stay Tuned To Read More On Value Stocks & Growth Stocks!

Anyways, So that is it for today!
LEAVE A COMMENT IF YOU'VE GOT SOMETHING TO SAY!

Thanks For Reading!

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