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Finance Dictionary and Glossary of Investment Terms
inflation risk
Definition 1.
The possibility that the value of assets or income will decrease as inflation shrinks the purchasing power of a currency. Inflation causes money to decrease in value at some rate, and does so whether the money is invested or not.
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Definition 2.
The uncertainty over the future real value (after inflation) of your investment.
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Definition 3.
Also called purchasing power risk, the risk that changes in the real return the investor will realize after adjusting for inflation will be negative.
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Definition 4.
The risk that our money will not be worth as much in the future. That''s because the cost of the things we need to buy, such as like housing, clothing and medical care all increase. Guaranteed investments like bank accounts do not keep pace with inflation.
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