Inflation and Investors

Periods of rising inflation are always a cause for concern. This is especially true of high net-worth investors looking to protect long-term solvency. Some pundits are talking about the current recession hitting its peak, but even if those calls are accurate, a return to a safer financial footing will take months. So strategizing is key.

For the record, the rate of inflation is still climbing, but happily at a slower rate month over month. The June rate was a record-breaker, coming in at 9.1 percent–the highest since November of 1981. July provided a slightly rosier picture at 8.5 percent rate. (A slowdown in energy cost increases was the prime driver of that dip, although such essentials as food and shelter continued to climb.)

There are some hedges that private investors can take to minimize (if not totally guard themselves against) the risk of inflation and its related woes–recession and stagflation. First of all, approach your hedging strategy with a cool head. With the help of a trusted financial advisor, investors can better see the current fiscal conditions with a long-term view.

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