Transitory or not, inflation should be a concern
Nancy Davis
Portfolio Manager for The Quadratic Interest Rate Volatility and Inflation Hedge ETF (ticker: IVOL) and The Quadratic Deflation ETF (ticker: BNDD)
As I mentioned in a recent appearance on Bloomberg TV’s Wall Street Week with David Westin, I believe inflation is something that investors should be concerned about, whether it is transitory or not.
The “transitory” debate misses an important point: a well-diversified portfolio includes inflation protection.
I believe investors have only recently started to consider inflation diversification in their portfolio.
Inflation makes everything we need to buy, everything we want to do, and every financial goal we have more expensive. It particular, inflation punishes retirees who do not benefit from rising wages. A few years of inflation over 2% would significantly reduce the value of savings built up over a lifetime, especially with interest rates so low. Everyone who is saving and investing should be paying attention.??
For more about these issues, I hope you’ll watch my recent appearance on Wall Street Week with David Westin and the always insightful Peter Kraus, where I discuss the importance of watching market-based measures of inflation:?https://pfc.ltd/?Mzk5MDQ
ForbesBLK Member | 10% unemployment reduction in Africa ?? by 2030| Sustainable Development | Startup Ecosystems | Impact Investing | Digital Growth Marketer | Artificial Intelligence(AI) | YALI Member
3 年????
Portfolio Manager and Top Financial Risk & Research Consultant to $25B+ of Elite HNW Family and Hedge Funds since 2006. Founder, CEO, and PM of III Macro LLC - with SMA returns +25% net annual, since 2009. (5Y also 25%)
3 年Uh, I am not sure this is mathematically true?! Key Quote: “ A few years of inflation over 2% would significantly reduce the value of savings built up over a lifetime, especially with interest rates so low.” (Very vague!?) In fact - I am quite certain - higher inflation (up to 4%?) is very good for investors. I have long argued for a 3% inflation target, and noted the Fed’s 2% target was NEVER meant to be “from below”. It sad how “too low” inflation: entrenches the rich; hurts the young borrowers; and stifles the job/pay dynamic. More inflation please?!
Founder / Proven Leader / Trusted Board Member / Innovative Program Director / Mentor / Entrepreneurial Consultant
3 年We are definitely post #transitory #iinflation.