The best time to build an ark isn’t when its raining and flood waters are starting to rise – an axiom that can apply to many areas of investing. Perhaps, however, no time is as prudent as when it comes to inflation fighting. The invisible hand of prices hasn’t fairly muted for what seems like a decade. Both the Great Recession and coronavirus pandemic have managed to keep the lid on key measures of consumer and producers’ prices.
But it probably won’t be like that for long.
While Zimbabwe-styled hyperinflation isn’t in the cards anytime soon, the potential for higher overall inflation is here; especially considering the Fed’s latest policy changes and the likely rebound from the pandemic. For investors, we’ve gotten too complacent with our low inflation environment.
The time to focus on fighting the invisible force could be now.
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