Markets vs Inflation(CPI US) also known as Inflation-Adjusted Return.
The inflation-adjusted return is the measure of return that takes into account the time period's inflation rate. The purpose of the inflation-adjusted return metric is to reveal the return on an investment after removing the effects of inflation.
Removing the effects of inflation from the return of an investment allows the investor to see the true earning potential of the security without external economic forces. The inflation-adjusted return is also known as the real rate of return or required rate of return adjusted for inflation. It is a more accurate measure of investment performance than the nominal rate of return.
The inflation-adjusted return accounts for the effect of inflation on an investment's performance over time.
Also known as the real return, the inflation-adjusted return provides a more realistic comparison of an investment's performance.
Inflation will lower the size of a positive return and increase the magnitude of a loss.
Assume you have saved $10,000 to buy a car but decide to invest the money for a year before buying to ensure that you have a small cash cushion left over after getting the car. Earning 5% interest, you have $10,500 after 12 months. However, because prices increased by 3% during the same period due to inflation, the same car now costs $10,300.
Consequently, the amount of money that remains after you buy the car—which represents your increase in purchasing power—is $200, or 2% of your initial investment. This is your real rate of return, as it represents the amount that you gained after accounting for the effects of inflation.
Markets vs Inflation indicators use in 1 months interval
SPX
,
BTCUSD
,
GOLD
,
DJI
The inflation-adjusted return is the measure of return that takes into account the time period's inflation rate. The purpose of the inflation-adjusted return metric is to reveal the return on an investment after removing the effects of inflation.
Removing the effects of inflation from the return of an investment allows the investor to see the true earning potential of the security without external economic forces. The inflation-adjusted return is also known as the real rate of return or required rate of return adjusted for inflation. It is a more accurate measure of investment performance than the nominal rate of return.
The inflation-adjusted return accounts for the effect of inflation on an investment's performance over time.
Also known as the real return, the inflation-adjusted return provides a more realistic comparison of an investment's performance.
Inflation will lower the size of a positive return and increase the magnitude of a loss.
Assume you have saved $10,000 to buy a car but decide to invest the money for a year before buying to ensure that you have a small cash cushion left over after getting the car. Earning 5% interest, you have $10,500 after 12 months. However, because prices increased by 3% during the same period due to inflation, the same car now costs $10,300.
Consequently, the amount of money that remains after you buy the car—which represents your increase in purchasing power—is $200, or 2% of your initial investment. This is your real rate of return, as it represents the amount that you gained after accounting for the effects of inflation.
Markets vs Inflation indicators use in 1 months interval
SPX
,
BTCUSD
,
GOLD
,
DJI