Inflation - Your Biggest Worry

Assets need to grow above the inflation rate in order to grow at all. Inflation is the biggest worry when trying to grow assets for retirement. Future dollars get discounted, or become worth less, through inflation. Investors need to overcome the discounting of inflation in addition to achieving the desired growth.

The long term inflation rate is 3% (from 1900 through 2016), but inflation can vary dramatically. In fact, inflation has averaged over 4% over the last 45 years.

1)https://www.minneapolisfed.org/community/teaching-aids/cpi-calculator-information/consumer-price-index-and-inflation-rates-1913

2)http://www.in2013dollars.com/1903-dollars-in-2017?amount=1

 

Disclosure:

The information presented here is the opinion of the author and may quickly become outdated and is subject to change without notice. All material presented in this article are compiled from sources believed to be reliable, however accuracy cannot be guaranteed. No person should make an investment decision in reliance on the information presented here.

The information presented here is distributed for education purposes only and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or participate in any particular trading strategy.

Performance data showing past performance results is no guarantee of future returns.

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