In this month’s client’s corner, we will be discussing how to protect your portfolio from inflation. Similar to how taxes can chip away at your earnings, so does inflation. We often describe inflation as financial death by a thousand cuts. Investors too often look at “the numbers” in their portfolio without asking what those numbers can actually buy over time.
There is no such thing as an inflation-proof investment, but investors can take measures to protect themselves. Risk-averse investors, particularly those nearing and in retirement, will need to be especially careful of what inflation can do to their standard of living if their investments can’t keep pace with inflation. For equity investors, companies that are able to pass on their cost increases to customers and corporations that have low debt offer some safety in an inflationary environment.
Looking back at points in history where inflation was raging, real assets, like stocks, dividend paying ones more specifically, have always been the best way to protect your wealth.
Our belief is that you must construct your portfolio proactively factoring in inflation and short term volatility and always remember that investing doesn’t happen in a straight line. There will be bumps along the way, but time will generally heal all wounds. Rash decisions based on emotions can be devastating to your overarching retirement goals.
Thinking about hiring a professional to help you implement a long-term financial strategy? We would be more than happy to set up a 30-minute discovery call to get a better understanding of your unique situation..
Read The Full Commentary
If you do not have access to our monthly email, you can request it here:
Your privacy is fully protected. By filling out this form to request this month’s commentary, you give explicit permission for LT Wealth Management Partners to email you to deliver our e-newsletter. It is important to note that your consent acknowledges agreeing to receive our newsletter knowing that your name and email may be stored on external servers outside of Canada.
