Why we have to invest? Mr.Inflation say yes

Street people cry for inflation, but wall street people laugh for it. Ever complain about the rising fuel price and yet unable to do anything? Do you feel the food you eat and the restaurant you always visit becoming more & more expensive? That is the "pressure" of inflation. Why i use quotation mark on"pressure" because there are only some people hate it but some other love it.



There is no need for me to explain what is inflation and why inflation make people cry. Lets see why people laugh for it.

As inflation means everything increase in its price, investors who invest in those commodities that get price appreciation will also experience an inflated value of asset or networth. Investors who invest in oil & gas related companies or directly invest in oil & gas commodity will get handsome profit from the increase in crude oil price. However, high crude oil price cause fuel price have to be adjusted to the suitable & higher level which eventually transfer the burden to the consumer. Both the investors & non-investors are the consumer of petrol. But once the petrol/crude oil price increase in value, O&G investor gain handsome profit and the profit is well enough for them to pump years of expensive petrol compared to non-investors have to feel the pain of hi-fuel price.

Besides our everyday petrol, inflation make everything expensive, which ranged from construction steel to dairy product. Manufacturers smile for it as their product can be sold out at a higher price (provided that the cost of raw material do not increase faster than the products) For example, palm oil producers expecting handsome profit from the rising crude palm oil price and steel manufacturers happy with the higher steel price, while the company buying those products can easily pass the hi-priced to end-consumer, consumers, especially the non-investors will eventually be the victim.

Real estate is the same, development projects, increasing population & property demand or mere speculative trading activities make real estate price ever increasing. Who non-investors, owning a house become harder & harder. Low to medium-end people who are planning to buy a house will feel getting 1 is never been easy, cause as the income increase, their dream house price is also inflating. At another side, real estate investors become richer & richer, buying a property become easier & easier.

Thus, my advice is invest in financial asset or even tangible asset which will be benefited from the inflation. For example, buying O&G related company, the return will be good if the international crude oil price increase. You will feel that your networth is actually unaffected by the inflation, if not increase at a rate faster than the inflation rate. As mentioned in my KNM post, the return from investing in KNM is well enough for me to pump years of expensive fuel.

Besides that, some of the other investment which is proxy to inflation are like plantation company, steel, miner & also property companies. In booming economy enviroment, where inflation are high, the return form investing in the correct inflation-proxy is going to be very good.