It’s the buzzword of the financial world this summer. If you’ve tuned into CNBC or read the Wall Street Journal, you’ve more than likely seen it discussed ad nauseam. Even if you pay no attention to the news, you’ve probably noticed examples of inflation in your everyday life. Have groceries seemed more expensive lately? Have you tried to do a project around your house – only to be stunned by the prices of supplies? These are all potentially results of inflation.
The question is: are these short term increase in prices here to stay?
The fact is, nobody knows for sure. There are two sides to the argument and both have valid reasoning for their opinions. The Federal Reserve insists that this period of higher inflation is only “transitory”. Others have the thought that trillions of dollars of stimulus issued by the government, combined with worldwide supply chain complications, means that inflation is here to stay. After all, inflation at its simplest is too much money chasing too few goods.
At our last Investment Roundtable meeting, we came to the conclusion that we do not have a strong opinion either way. However, we will continue to monitor the economic environment. A carefully thought out portfolio should not be overly sensitive to inflation and a short term trend should not impact decisions on a long term investment plan.
If you have questions about your personal situation – schedule an appointment.