Fisher investment theory

Fisher’s investment theory, developed by economist Irving Fisher, emphasizes the importance of real interest rates—adjusted for inflation—for making sound investment decisions. It suggests that investors should focus on the real return they earn, rather than nominal figures, to better gauge the true profitability of their investments. By understanding the relationship between interest rates and inflation, investors can identify opportunities that preserve or grow their purchasing power over time. This approach promotes investing in assets that generate real, inflation-adjusted returns, helping individuals maintain their wealth's value through changing economic conditions.