With the consumer price index at forty-year highs, Matt Balderston, Pure financial advisor, CFP®, AIF® will explore what types of investments might make sense in an inflationary environment. It is important to note that there are no foolproof methods to avoid short-term surprises. The bottom line is that if inflation readings come in higher than expected, most major asset classes are likely to suffer. However, as your time horizon stretches out, you can take steps to position your portfolio for optimal performance in an era of rising prices.

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• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
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• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
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CFP® – The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.
AIF® – Accredited Investment Fiduciary designation is administered by the Center for Fiduciary Studies fi360. To receive the AIF Designation, an individual must meet prerequisite criteria, complete a training program, and pass a comprehensive examination. Six hours of continuing education is required annually to maintain the designation….(read more)

LEARN ABOUT: Investing During Inflation

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Inflation is a continuous increase in the prices of goods and services. It is a natural part of any economy and can be caused by various factors such as an increase in demand, supply shortage, or a rise in production costs. However, when inflation is rapid, it can have a significant impact on the economy, including the stock market and investment opportunities. As an investor, it is important to understand how to invest when inflation is raging.

One way to invest during an inflationary period is to focus on assets that typically perform well during inflation, such as gold, real estate, and commodities. Gold is often seen as a safe haven asset in times of economic uncertainty and inflation. Real estate can offer protection against inflation since it is a tangible asset that can appreciate over time. Commodities such as oil, metals, and agricultural products tend to rise in price during inflation. By investing in these assets, investors can potentially offset the negative effects of inflation on their portfolios.

Another way to invest during an inflationary period is to consider inflation-protected securities such as Treasury Inflation-Protected Securities (TIPS). TIPS are U.S government bonds that offer a fixed return plus inflation adjustment. The principal and interest payments of TIPS are adjusted based on changes in the Consumer Price Index (CPI). By investing in TIPS, investors can protect their portfolios from the eroding effects of inflation.

Investors can also consider equity investments in companies that have pricing power. These are companies that are able to increase prices on their goods or services without losing customers. Companies with pricing power are often in industries such as healthcare, technology, and consumer staples. These firms have the ability to maintain margins during inflationary periods and generate steady returns for their shareholders.

Diversification is another essential strategy to invest during inflationary periods. Investors should consider diversifying their portfolios across various asset classes, including stocks, bonds, cash, and alternative investments. By diversifying, investors can potentially minimize the impact of inflation on their overall portfolio and spread risks.

Lastly, investors should also be aware of the risks associated with borrowing during inflationary periods. Borrowing at fixed rates during an inflationary period could lead to higher interest rates in the future, potentially making it difficult to meet debt obligations. If borrowing is necessary, investors should consider borrowing at variable rates or shorter-term loan tenures.

In conclusion, investing during an inflationary period requires a proactive approach and a deeper understanding of the investment landscape. By investing in assets that perform well during inflation, inflation-protected securities, equity investments in companies with pricing power, and diversifying portfolios, investors can potentially offset the negative effects of inflation on their investments.