Ambrose currently owns shares in several individual stocks. To diversify his portfolio, he is considering buying mutual funds or real estate. His primary concerns are protecting his investments, especially since the inflation rate is increasing more than expected. In 3–5 sentences, identify which investment option is best for Ambrose. Support your answer with evidence.
In Ambrose's situation, investing in mutual funds would be the best option to protect his investments and hedge against the increasing inflation rate. Mutual funds offer diversification by investing in a variety of securities, thus spreading risk across different asset classes. This can help cushion the impact of inflation on his portfolio. Additionally, mutual funds are managed by professional fund managers who actively adjust the portfolio to adapt to changing market conditions, which can provide added protection during times of economic uncertainty. Overall, investing in mutual funds would be a prudent choice for Ambrose to safeguard his investments and potentially mitigate the impact of rising inflation.
