Traditional Investing & Portfolio Theory

How does inflation affect investment returns?

Inflation erodes investment returns by reducing what each rupee can buy, so your real gain is always lower than the headline number suggests. If your portfolio grows 9% in a year while prices rise 6%, your purchasing power has increased by only about 3%. This is also why holding cash carries a quiet cost: an idle balance loses real value every year inflation runs. Investors therefore measure success against inflation, not against zero, and weigh whether an asset is expected to outpace it over their horizon. Outcomes vary and are not guaranteed.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.