Be a Lender in Deflation

As all of you know that, Indian Economy has been slipped into Deflation (Negative Inflation) since last couple of weeks. So What is the Investment advise for Investors during the time of Deflation?

Well, The advise is – Be a Lender during the time of Deflation.

There is an old saying that, it is better to be a Lender rather than borrower during the time of Deflation. Because Deflation is the time during which your Money becomes Asset. Otherwise during the time of Inflation, your Money is not an Asset because inflation reduces the purchasing power of your money over the time.

Deflation is reverse. Means because of Deflation in the economy, the purchasing power of your money will increase over the time instead of decreasing. And that’s a good thing for Lender. So it is better to be a lender during the time of deflation means you should increase the Debt allocation of your portfolio during the time of Deflation.

You should invest in Bonds, FDs & Fixed Income securities during the time of deflation.