The inflation worries that have been building up among investors have finally become a reality.
While the Federal Reserve is calling inflation "transitory," there is still more room for growth as the economy fully reopens. There will be pent-up consumer demand, which has already put pressure on prices and increased the cost of household goods and services.
According to a recent release from the U.S. Department of Commerce's Bureau of Economic Analysis, inflation, as measured by a gauge preferred by the Fed, increased 3.6% in April from a year ago. A rate this high has not been seen since the Great Recession.
Savvy investors want to make sure to address inflation because if they don't, it can decrease their purchasing power.
"Inflation over the long run is going to happen," says Grace Yung, board ambassador for the Certified Financial Planning Board and managing director at Midtown Financial Group based in Houston. "And we have to keep up with that, and therefore, we have to build portfolios that outpace inflation."
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PS - This article talks to three investment options for inflation, a fourth is the stock market. Yes, owning stocks in companies that produce valuable products and services during times of inflation can be a great way to protect and even grow your purchasing power during times of inflation. - Josh@RetirementGuy.com
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