High yields + inflation

[funduffer]

Given the high rate of inflation (CPI > 5%, RPI > 7%), it will be interesting to see which higher yielding shares/funds are most able to cope and deliver inflation matching payouts in the next couple of years.

The IT's will be trying to rebuild their reserves following all the dividend cuts over the last 2 years, so we may see sub-inflationary rises here.

For company shares, it may be possible to see dividend increases that match inflation, at least in certain sectors that do well in inflationary conditions (Eg Oil&Gas, Commodities, maybe housebuilding).

As for fixed interest, well it is fixed, so probably not, but others may have other views!

What is one to do if you rely on investment income to cope with high inflation?

FD

[77ss]

Given the high rate of inflation (CPI > 5%, RPI > 7%), it will be interesting to see which higher yielding shares/funds are most able to cope and deliver inflation matching payouts in the next couple of years.

The IT's will be trying to rebuild their reserves following all the dividend cuts over the last 2 years, so we may see sub-inflationary rises here.

For company shares, it may be possible to see dividend increases that match inflation, at least in certain sectors that do well in inflationary conditions (Eg Oil&Gas, Commodities, maybe housebuilding).

As for fixed interest, well it is fixed, so probably not, but others may have other views!

What is one to do if you rely on investment income to cope with high inflation?

FD

Not very helpful, I'm afraid, but many will just have to tighten their belt - and hope that it is indeed 'transitory'.

Useful word, transitory. Always true of course - in the sense of this too shall pass. How to imply a short duration without actually saying so.

[vand]

Even if they can't increase their earnings and payouts to match inflation, they are probably the least worst option. Ideally you want to identify companies that have a large economic moat and pricing power to easily pass on the costs to customers. Maybe this is why tobacco companies have shot up recently!