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Effective financial planning during inflationary periods primarily focuses on preserving and enhancing purchasing power. Inflation decreases the value of money over time, meaning that the same amount of money will buy fewer goods and services in the future. Strategically investing during these times can help mitigate the effects of inflation.

Investments that typically perform well during inflation include real assets such as real estate and commodities, as they tend to increase in value when prices rise. Additionally, stocks can offer potential growth that outpaces inflation if the companies can pass on rising costs to consumers. Bonds and fixed income investments might not keep up with inflation unless they are specifically structured to do so, such as inflation-linked bonds.

The focus on strategic investments allows individuals and businesses to not only protect their purchasing power but potentially grow their wealth in real terms during inflationary periods. This approach contrasts with merely reacting to economic conditions or relying on fixed income savings that can erode in value during inflation.