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What is Deflation, Stagflation, Hyperinflation & Headline Inflation?

What is Deflation, Stagflation, Hyperinflation & Headline Inflation?

What is Deflation?

deflation

Deflation is also known as the opposite of inflation, which refers to a condition “where there is a general decline in the prices of goods and services over a time period which results in the hike of currency purchasing power.” Usually, it is observed that the deflation occurs when the general price level declines due to lower inflation rate (i.e. below 0% or less also called negative inflation rate). During deflation, we buy more goods and services with the same amount as we were buying earlier. Deflation generally occurs due to either reduction in the supply of money or credits or due to direct contractions in spending. These spending may be in the form of a reduction in government spending, personal spending or investment spending. Continue reading

How does Inflation affect Stock Market?

How does Inflation affect Stock Market?

Inflation affect Stock Market

It is not necessary that Inflation affects stocks of every listed company in the stock market. It may affect stocks adversely or favorably depending on their fundamentals. If any company is having poor fundamentals then the stocks of that particular company will definitely suffer and on the contrary, the prices of stocks having rich fundamentals will go up. Continue reading

What is Inflation and how it is calculated?

What is Inflation and how it is calculated?

What is Inflation

What is Inflation: Inflation means “a general rise in the prices of goods and services over a time period which results in the loss of currency purchasing power.” It is observed that when the general price level rises due to rise in inflation, we are forced to buy fewer goods and services as we were buying earlier. We can explain them by quoting an example here. If we were buying one liter of Milk for Rs. 10-12 in 1995 then the same Milk we are buying at Rs. 40-45 in 2015. Thus, we can say inflation results in loss of value of money purchasing power. Continue reading

What is Equity Linked Savings Scheme (ELSS)?

What is Equity Linked Savings Scheme (ELSS)?

Equity Linked Savings Scheme

An Equity Linked Savings Scheme (ELSS) is an open ended mutual fund which provides investors both the better capital appreciation in longer term and the tax benefits as it comes under section (u/s) 80C of the Income Tax Act 1961. ELSS has a lock in period of 3 years that means investors can exit from these funds by selling only after completion of 3 years from the respective investment date.

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