The inflation rate in the U.S., measured by the Consumer Price Index (CPI) which gauges the changes in prices, currently sits around 2.3%. This figure states that if you put a $100 bill under your mattress, the purchasing power of that $100 will be 2.3% less than one year from now. Since the Fed initiated the Quantitative Easing programs in 2009, interest rates are still sitting around 0%, which has reduced the yields on bank deposits and government bonds to levels that are lower than the current rate of inflation. To sum it up, if you’re bank deposit or bond is not making at least 2.3%, you are losing money!
In order to hedge against inflation, many investors attempt to position their portfolios in ways to benefit, or at the very minimum protect themselves from inflation. Read this week’s Thought of the Week to hear what strategies our Investment Committee thinks can help you hedge yourself against inflation.
Click Here for the Weekly Thought As an Investment Advisory Representative working in conjunction with Global Financial Private Capital (GFPC) we are provided weekly thoughts on what is happening in the economy and the market. Written by our investment committee at GFPC we find these thoughts to be informative and interesting.
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