Inflation Steals your Savings
While economic conditions in the U.S. are good, stocks are
expensive. The job market has improved considerably with unemployment reaching a
17-year low.
Increasing wages is usually associated with increasing
inflation, indicating a growing economy.
What does this mean for your portfolio?
Inflation is back so you should protect your portfolio since your purchasing power will decrease overtime because prices are going up.
LEARN MORE ABOUT INFLATION AND
HOW TO PROTECT YOUR SAVINGS
"
HealthView Services’ 2017 Retirement Health Care Costs Data Report shows retiree health care expenses will rise at an average annual rate of 5.47% for the foreseeable future – almost triple the U.S. inflation rate from 2012-2016 (1.9%) and more than double annual projected Social Security cost-of-living adjustments (COLAs –2.6%). As this Report details, the compounding impact of
health care inflation means that health care costs will be one of the most significant expenses in retirement."
Executive Summary
• As you get closer to retirement, you face an increasing risk of negative real returns, also called inflation-adjusted returns. This erodes your purchasing power and has a negative impact on your wealth.
• Inflation (or price increase) is higher for college tuition, medical care, food, and energy.
• Certain types of investments could protect you against inflation. However, their effectiveness, reliability, and cost vary.
• One way to prepare yourself against inflation (to hedge) is to diversify your portfolio beyond traditional stocks and bonds, by including real assets (commodities, real estate, global REITS…), and inflation-linked bonds (TIPS).
At BFM, we help you make better financial decisions so that you can have peace of mind.
Our core beliefs are:
• Asset Allocation is the most important determinant of performance
• A globally diversified portfolio reduces risk
• A disciplined investment process is critical
BFM enables you to increase your wealth through independent financial advice with no conflict of interest. We neither sell products nor receive commissions.
