‘Thank your stars, start putting your money…’: Expert on how to survive inflation, interest rate swings

In today’s volatile financial landscape, where inflation spikes, geopolitical tensions, interest rate swings, and equity market corrections routinely dominate headlines, investors face a daunting challenge: how to generate long-term returns without being overwhelmed by short-term risks.

For those fortunate enough to earn a good salary, financial expert Akshat Shrivastava offers simple but powerful advice: thank your stars and start putting your money into income-generating assets. According to Shrivastava, these assets include stocks, gold, real estate, and even cryptocurrencies. The key? Don’t get stuck in endless debates about timing or picking “the perfect asset.” Instead, start investing whatever you can as soon as possible.

But Shrivastava stresses three essential principles that every investor should remember:

1) Don’t chase a running asset. When prices soar, it’s tempting to jump in, fearing you’ll miss out. But that’s often the worst time to buy. Instead, wait for a “cool off” — when markets look bleak or undervalued — that’s when the real opportunities lie.

2) Invest most of your money in fast-growth industries. Investors love growth assets, so lean towards sectors like technology rather than slower-growing industries like manufacturing. Over the long haul, fast-growing sectors can deliver superior returns and help your portfolio outpace inflation.

3) Be tax efficient. Maximizing tax benefits can significantly boost your net returns. If you’re building wealth, make full use of tax deductions. If you’re rich, consider building a firm to invest through, which can be more tax-efficient. And if you’re uber-rich, exploring different tax residencies can be a game-changer.

Shrivastava reminds us that the world increasingly rewards those willing to take calculated risks. Playing it too safe often means your money grows slower than inflation, effectively losing purchasing power over time. The goal isn’t to avoid risk but to learn to manage it intelligently.

This is where asset allocation becomes crucial. By spreading investments across different asset classes—equities, debt funds, gold, real estate, and others—you can reduce the risk of heavy losses in any one area. For instance, during periods of geopolitical turmoil, equities may falter while gold often rises as a safe haven. This balance helps smooth out volatility and protects your portfolio’s overall health.

Many investors overlook diversification when markets are booming, but the past six months have been a wake-up call. While equity funds have struggled, assets like gold and certain debt funds have performed well, underscoring the need for a balanced approach.

A well-diversified portfolio might include a 60:40 split between equity and debt or a 50:30:20 mix of equity, debt, and commodities like gold and silver. Over the past year, such allocations would have provided better risk-adjusted returns compared to a pure equity portfolio.

In the end, building wealth in today’s uncertain financial world demands patience, discipline, and a strategic mindset. Start investing steadily in income-generating assets, focus on growth industries, optimize your tax situation, and diversify smartly. By managing risk rather than fearing it, you give your money the best chance to grow steadily through market ups and downs.

As Shrivastava puts it: don’t overthink it—just start. The stars may have aligned with your salary, so make the most of it and set yourself up for financial success in the long run.