"Mastering Inflation 5 Underrated Tools Every Investor Professional Should Know (2025 Edition)

Mastering Inflation 5 Underrated Tools Every Investor Professional Should Know (2025 Edition)

As the Philippine Statistics Authority (PSA) recently announced that headline inflation remained steady at 2.9% in January, investors are left wondering what lies ahead. With inflationary pressures expected to persist, it's crucial for professionals to stay ahead of the curve and develop strategies to navigate this unpredictable landscape.

In this article, we'll delve into 5 underrated tools that every investor professional should master to ensure they're prepared for any eventuality

1. Inflation-Adjusted Analytics Tools

Investors often rely on traditional analytics tools to gauge market performance. However, these tools may not account for the effects of inflation on investment returns. Canard offers an innovative approach by adjusting analytics for inflationary pressures, enabling investors to make more informed decisions and avoid costly mistakes.

With Canard, you can

Analyze historical data to identify trends that may be influenced by inflation
Create custom scenarios to test the impact of different inflation rates on investment portfolios
Make data-driven decisions with confidence, knowing your analysis is adjusted for inflation

2. Inflation-Hedged ETFs

Investors seeking exposure to markets while mitigating the effects of inflation can turn to inflation-hedged ETFs. These funds typically invest in assets that historically perform well during periods of high inflation, such as commodities or real estate.

Examples include VanEck Inflation-Adjusted Treasury ETF (TDT) and iShares Core U.S. Aggregate Bond ETF (AGG). Benefits include diversifying your portfolio and potentially generating returns while hedging against inflationary pressures.

3. Monetary Policy Simulation Tools

Investors should stay informed about central banks' monetary policies, as they can significantly impact interest rates and inflation expectations. FRED's Monetary Policy Simulator allows you to experiment with different policy scenarios, testing the effects on markets and inflation.

With this tool, you can

Analyze historical data to understand how different monetary policies affected inflation
Simulate future scenarios to predict potential impacts on markets and inflation
Develop informed views on the likelihood of interest rate changes or quantitative easing

4. Inflation-Indexed Investments

Investors seeking stable returns while keeping pace with inflation can consider inflation-indexed investments, such as Treasury Inflation-Protected Securities (TIPS). These instruments offer a fixed real return, ensuring your investment grows with inflation.

Examples include iShares TIPS Bond ETF (TIP) and Vanguard Short-Term Inflation-Protected Securities ETF (VTIP). Benefits include generating returns while protecting purchasing power against inflation.

5. Macro-Economic Indicators

Investors should closely monitor macro-economic indicators, such as the Consumer Price Index (CPI), Producer Price Index (PPI), and GDP growth rates. These metrics provide insights into inflationary pressures, helping investors adjust their strategies accordingly.

With these indicators, you can

Track historical trends to identify patterns in inflation data
Analyze current market conditions to inform investment decisions
Develop a framework for adjusting your portfolio in response to changing macroeconomic indicators

In conclusion, mastering these 5 underrated tools will empower investor professionals to navigate the complexities of inflation and make informed decisions. Whether you're a seasoned pro or just starting out, incorporating these tools into your toolkit will give you a competitive edge in today's market.

Bonus Tip Don't forget to stay up-to-date with market-moving news and data releases from reputable sources like the PSA, Federal Reserve, or Bureau of Labor Statistics (BLS). Staying informed is key to staying ahead of inflationary pressures!

By incorporating these tools into your investment strategy, you'll be well-equipped to tackle whatever 2025 may bring.

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.