Inflation can be an accumulation or accumulation of various and individual price increases, such as the oil price spike in the 1970s. Today, many argue with temporary inflation, which is based on the fact that there are small inflation niches caused by bottlenecks (supply shocks) and supply chain problems. Problems that may be resolved soon.
We talked about it Inflation hot spots in the past. From this Vox post and from the proposed strategy:
“Instead, the federal government should intervene in certain areas to prevent certain types of rapidly rising prices from accelerating further.”
Can central banks and politicians with a risk of inflation or stagflation prevail? That remains to be seen and there are so many different moving parts. No two economic periods are the same. No correction or rally in the stock or bond market is the same.
The VOX article is very good, but a guess. Maybe even a very well thought out and educated guess. However, it is difficult to make forecasts about the economy.
At least we’re talking about inflation and its real risks. When we protect our wealth, we do not guess; We create a portfolio based on one truth – that we don’t know the future. We don’t know what’s in stock.
Gold and other commodities helped protect portfolios during stagflation (see these supply shocks), while stocks failed to withstand inflation in the US and Canada. To the best of my knowledge, international stock markets have not been the hedge required either, although certain types of stocks such as energy and commodities, technology and consumer discretionary could help. You could include some inflation-adjusted bonds in your fixed income component.
Invest and maybe hedge accordingly.