You are likely all too familiar with hearing about “inflation” recently and watching prices go up. Whether it’s paying more for gas or seeing used car prices rise so fast that in some cases they are even more expensive than new cars!
What is driving this inflation? Well, it really depends on who you talk with. Economists debate back and forth all of the time. You often hear debates on if it’s being caused by supply chain issues, monetary policy, government stimulus, or any number of other reasons. The reality is, there are likely a lot of different factors that are pushing prices up.
But here’s what we do know. Whether or not inflation increases in the future, we plan to do the same thing. Buy and hold index funds. Owning index funds is a hedge against inflation. If consumer prices go way up, that bubbles up to corporate profits which are reflected in increased share prices. If inflation stays low, well, companies still profit which is reflected in increased share prices.
As always, reminding you to build wealth by following the two PFC rules: 1.) Don’t invade sovereign democratic nations and 2.) Don’t succumb to hateful propaganda.
– Shane & Vivi