Good Financial Reads: All About Inflation (Part Two)

Inflation rates have recently risen to levels we haven’t seen in 30+ years. Sustained inflation can cause real challenges as your purchasing power degrades over time.

If higher prices are creating a strain on your finances, there are 3 things you can do to minimize the impact:

From October 2020 to October 2021, the Consumer Price Index for All Urban Consumers grew by 6.2 percent, which according to the Bureau of Labor Statistics, was the most significant 12-month gain since November 1990. In relation to this data, we have dedicated today’s episode to exploring more about inflation. Throughout this episode, Grant shares his thoughts about the impact of inflation on the present economic environment and numerous ways to mitigate the risk of inflation.

The normally quiet Thanksgiving trading period has been anything but this year. Stocks got whacked in a holiday-shortened trading session Friday as word of a new COVID variant hit the wires. We got a respite on Monday, only to be hit Tuesday with hawkish comments from Federal Reserve Chairman Jerome Powell. In his words, it’s time to retire the word “transitory” when describing inflation. What does this hawkish turn by the Federal Reserve mean for investors?

Last Fall we started talking about the prospect for higher inflation and what that would mean for the stock market. Our thesis was: if inflation moves higher, then stocks would suffer. Over the last year, we’ve certainly gotten a heavy dose of inflation, more than we would’ve thought. Yet stocks are sitting at all-time highs and are up over 20% this year. Is the link between (higher) inflation and (lower) stocks broken? We don’t think so. In this month’s letter, we lay out why we believe: 1) inflation will continue to surprise to the upside, and b) why stocks will eventually have to reckon with this inflationary reality.