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Mobius: Buy Stocks Now Before Inflation Soars, Rates Rise

Tuesday, 05 Apr 2011 08:33 AM

Inflation rates are rising across the globe so investors would be wise to put their money into equities, says Mark Mobius, chairman, Templeton Emerging Markets Group.

The European Central Bank will likely hike rates to cool rising consumer prices, and monetary authorities in the United States are recognizing the need to consider similar actions.

Inflation can eat into returns on bonds, thus making stocks look more attractive.

"As you know, equities are one of the few investments that you can make that are going to adjust to inflation," Mobius tells CNBC.
"There's always inflation. No currency will hold its value."

mark_mobius200.jpg
Mark Mobius
(Templeton photo)
Investors should also avoid looking at today's news for guidance and instead, plan an investment strategy based on five-year forecasts.

"In order to be different from the crowd you have to look forward five years," Mobius says.

Also, keep an eye on emerging markets, Mobius adds.

"These countries are leapfrogging … that means the whole process [of development] is accelerating. Taking the latest technology, not having to go through all the steps in between."

Federal Reserve officials have warned of the need to take action against inflation, although not everyone has been hawkish.

William Dudley, president of the New York Federal Reserve Bank, has said that while unemployment rates are improving, more sustained economic growth may be needed before acting.

"A stronger recovery with more rapid progress toward our dual mandate objectives is what we have been seeking," says Dudley, according to Reuters. "This is welcome and not a reason to reverse course."

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Inflation rates are rising across the globe so investors would be wise to put their money into equities, says Mark Mobius, chairman, Templeton Emerging Markets Group. The European Central Bank will likely hike rates to cool rising consumer prices, and monetary authorities...
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2011-33-05
Tuesday, 05 Apr 2011 08:33 AM
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