Ask Ed: Questions And Answers (Complimentary eBook Every Investor Should Read Today)

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Question: Is inflation coming back?

Answer: Until recently, only the cost of services had been rising, but the cost of goods now appear to be following suit. Prices for everything from DRAM chips to copper, lumber, oil, grains and other goods are rising.

Question: What does rising inflation mean for your bond portfolio?

Rising inflation should continue to exert upward pressure on interest rates. The benchmark 10/year treasury yield is now at 1.07% up from 0.55% a few months ago. Inflation and rising rates are the nemesis for many bond portfolios, excepting ones with very short maturities or durations.

Question: What does rising inflation mean for your equity portfolio?

Early signs of inflation can actually be a tailwind to stocks. Stocks can tolerate mild inflation. Companies can charge more for goods and services and to the extent to which they are able to maintain their respective profit margins, can maintain a certain level profitability.

Inflation incentivized consumers to buy now before prices rises as opposed to deflation which brings about an attitude of “Why buy now, prices will be lower tomorrow.”

However, the worse inflation gets and the higher interest rates rise, the headwind to earnings becomes much worse.

Request Complimentary eBook: How To Select A Financial Advisor

HIGHLY RECOMMEND: THE INVESTMENT LESSONS IN THIS BOOK!

Our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and understand your tolerance for risk. Long-term relationships that encourage open and honest communication have been the cornerstone of my foundation of success.

Our approach is cost-effective and tax-efficient. As an independent investment advisor, we can offer you a personalized financial strategy, not a generic investment program. Your individual portfolio will be based on your unique situation, your values, your preferences and your goals. It will be designed to account for change, in the markets and in your circumstances.

As your professional partner, we’ll work hard to earn your trust and confidence, and provide the advice and service you deserve. Send me a note regarding any questions you may have about any particular investment concepts or products. We’ll get back to you quickly with a thoughtful answer.

Request A Copy of “How To Select A Financial Advisor” at

https://www.clientfirstwm.com/download-my-book

You can reach me directly at ed@clientfirstwm.com or call 501.603.0406

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