The Impact of Inflation on Your Finances Over Time

Inflation is currently at an all-time high (9.1% as of June 2022) and has been quickly increasing since 2020 to much dismay. Many factors have influenced this rapid development including the pandemic and the war in Ukraine.

While younger investors can afford to wait out this down period, finances still need to be structured to use less debt (if possible) and to invest savings in stocks, bonds, art, real estate, and commodities instead of holding on to cash.  Older investors may instead need to reevaluate their spending habits and budget, along with how the investments are currently structured in times of uncertainty. 

One harsh reality is the effect on 401K’s.  While it can be tempting to pull back on contributions, this is the time to keep them going and increase them if possible.  Dollar-cost averaging strategies are a good way to provide structure and capture the effects of volatility in the stock market.  

Over time, inflation will relieve itself but for now, we must think more strategically. If you have doubts or need assistance in reevaluating your finances, reach out to us and we can help come up with a great plan designed to grow in this depreciating time.

* Any opinions are those of the author and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

* Dollar-cost averaging cannot guarantee a profit or protect against a loss, and you should consider your financial ability to continue purchases through periods of low price levels.