Inflation fears are always lingering. Here we’ll look at what inflation is, why it occurs, how it’s measured, and the best assets to hedge against it with their corresponding ETFs.

// TIMESTAMPS:

00:00 - Intro
00:14 - What Is Inflation?
01:43 - How Is Inflation Measured?
02:26 - Why Does Inflation Occur?
03:24 - Annual Inflation Rate Formulas - How To Calculate
03:48 - Why Is Inflation Good?
04:16 - Why Is Inflation Bad?
04:54 - How To Control Inflation with Monetary Policy
06:12 - Inflation Examples
07:27 - Inflation Hedges – Do You Even Need Them?
10:16 - How To Hedge Against Inflation – Assets and ETFs
11:47 - Real Estate
12:16 - Commodities
12:55 - Gold
13:42 - Stocks
14:31 - Debt
14:55 - Short-Term Bonds
16:18 - TIPS and I-Bonds
18:32 - Conclusion
19:39 - Outro

// SUMMARY:

Inflation refers to an aggregate increase in prices, commonly measured by the Consumer Price Index (CPI), which decreases purchasing power. This means that for any given unit of currency, in this case the U.S. Dollar, you’re able to buy fewer goods and services as time goes on.

A country’s monetary policy helps maintain “healthy” levels of inflation. In the U.S., that responsibility falls largely to the Federal Reserve Bank or simply “the Fed.” The Fed attempts to keep inflation within reasonable limits in order to maximize employment, stabilize prices, and encourage spending. The main levers they can pull to achieve this are influencing interest rates and the money supply.

Inflation is always happening, hopefully at a steady rate, kept on the rails by a central bank. This expected inflation is already incorporated into asset prices. What we’re concerned with possibly protecting against is unexpected above-average inflation.

Even then, an investor with a long time horizon and a high tolerance for risk – and subsequently, a high allocation to stocks – likely shouldn’t be worried about short-term inflation. However, it’s perfectly suitable and even desirable for retirees, risk-averse investors, and those with a short time horizon to have some allocation to inflation-protected assets like TIPS.

Commodities and gold may not be great assets to save your portfolio from runaway inflation in the future, and are almost certainly suboptimal investments over the long term. Investors will likely come out ahead using assets like REITs, short-term nominal bonds, and TIPS. I’m not a fan of sector bets, but it may also be prudent to slightly overweight “defensive” sectors like Consumer Staples and Utilities if one fears inflation.

Assets and ETFs mentioned:
Real Estate - VNQ
Commodities - PDBC
Gold - SGOL
Stocks - VT
Debt
Short-Term Bonds - VGSH, SGOV
TIPS - VTIP, SCHP, LTPZ
I-Bonds

Read the blog post here: [ Ссылка ]

#investing #inflation #stockmarket #stocks #etfs #inflationhedges

// INVEST

► M1 Finance: [ Ссылка ]
► My comprehensive review of M1 Finance: [ Ссылка ]
► Get my dividend portfolio: [ Ссылка ]
► Lazy Portfolios: [ Ссылка ]
► Beginners’ reference guide: [ Ссылка ]
► Webull (for stock traders; get 2 free stocks): [ Ссылка ]

// SOCIAL

► Website: [ Ссылка ]
► Patreon: [ Ссылка ]
► Facebook: [ Ссылка ]
► Instagram: [ Ссылка ]
► Twitter: [ Ссылка ]

► Support my channel by shopping on Amazon (free for you): [ Ссылка ]

I appreciate all the support!

Disclaimer: This is not financial advice, investing advice, or tax advice. The information presented is for informational, educational, and entertainment purposes only. Investment products discussed are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here: [ Ссылка ]

Disclosure: Some of the links above are referral links. At no additional cost to you, if you choose to make a purchase or sign up for a service after clicking through those links, I may receive a small commission. This allows me to continue producing high-quality content on this channel and pays for the occasional cup of coffee. I have first-hand experience with every product or service I recommend, and I recommend them because I genuinely believe they are useful.

свернуть