Published Wednesday, April 18, 2018 at: 7:00 AM EDT
The threat of inflation is nothing like the double-digit affair of the 1970s, but it's still there. Dormant for years, inflation may seem irrelevant, but it remains a risk. Here's a short lesson for managing this risk.
In the 48 years after it raged in 1970, inflation was a tale of two times, distinctly different but equal in length. The first 24 years was a high-inflation period and low inflation marked the last 24 years.
The median Consumer Price Index, a widely-watched inflation barometer, was 3.8% for the 48-year span. However, the CPI topped 3.8% just once in the past 24 years, while hitting 3.8% or higher in 18 of the previous 24 years.
The table below shows the average yearly returns for seven distinct types of investments over the two 24-year periods. Some important observations:
This article was written by a professional financial journalist for MidAtlantic Capital Management, Inc. and is not intended as legal or investment advice.
© 2024 Advisor Products Inc. All Rights Reserved.
If you have friends or family members who need unbiased advice, please feel free to have them contact us.
We are available to provide an objective complimentary investment analysis of their current situation.
For more information or to schedule an appointment, please contact us.
© 2024 MidAtlantic Capital Management, Inc. All rights reserved.