Last week, The Bureau of Labor Statistics released some metrics that indicate we might be experiencing a higher rate of inflation than the federal reserve and other stakeholders have been expecting. We dedicated today’s episode to exploring what inflation is and why we should be concerned about it. Throughout the episode, Grant dives into how inflation occurs, how it influences the economy, how to measure inflation, the role of the federal reserve in keeping the economy stable, and what investors should keep in mind about maintaining a healthy portfolio in an inflationary environment.
[04:45] Understanding Inflation – What inflation is, why it happens and why we should be concerned about it.
[07:25] Measuring Inflation – Grant reviews some of the methodologies and indices that are used for measuring inflation and how these measurements indicate recent changes in the prices of consumer goods and services.
[13:25] Inflation and Deflation – Grant shares his take on why the two extremes of the spectrum can cause adverse effects on the economy and why maintaining a stable rate of inflation is better for the economy.
[16:58] The Federal Reserve – How the federal reserve maintains its policies in order to keep the economy stable.
[22:25] Inflation and Investments – How inflation affects investments and how different asset classes perform in inflationary environments.
[25:14] Pricing Power – Grant explains why companies that offer products and services with higher pricing power can adapt better to inflation.
[28:00] Diversification – Grant reviews some of the ways you can diversify your portfolio by taking advantage of assets that are less affected by inflation in the United States.
[35:48] Real Assets – Grant shares his take on how real assets, including real estate, perform in an inflationary environment and what investors should keep in mind about investing in hard assets.
Consumer Price Index – U.S. Bureau of Labor Statistics: