How To Protect Your Portfolio During Rising Inflation
The country is opening again after the severe disruptions we saw over the last year. But, the stimulus of the past year, coupled with the growing economy and some of the shortages we have experienced are causing rising prices. In fact, the Labor Department is reporting the fastest pace of inflation since 2008. So, what is inflation, and how you can help protect your portfolio?
First, let’s go over the differences between reflation and inflation. Reflation is more akin to what we are seeing now –price increases due to the reopening and growing economy, as the economy works its way back to full employment. Inflation is generally increasing prices in a more stable situation – when an economy is at full capacity, and unemployment is generally low.
To most of us, higher prices affect us negatively, regardless of the root cause. Shopkick, a retail marketing app, surveyed 19,000 con-sumers to see what their experience with inflation was. Of those, 86% have noticed increased prices, and 83% plan to tighten their belts because of it.
Inflation is a problem because it eats at the value of your retirement savings. Average inflation is about 2.9% according to trading-economics.com. So, even in optimal economic conditions, you’re losing 2.9% or more of your savings most years. But there are some strategies you can use to help protect yourself, your family, and your hard-earned money.
First, there are certain asset classes that are historically more resistant to inflation, like real estate. If you do not want to own property yourself, there are Real Estate Investment Trusts, ETFs, and other strategies that act as a good inflation hedge. Commodities are also often considered a classic inflation hedge because Inflation means rising prices. Commodity prices usually rise the most, as it takes a long time to build new capacity to satisfy the demand.
Second, Treasury Inflation Protected Securities, or TIPS are another classic option because they are designed to increase in value to help keep up with inflation.
Finally, it may seem counterintuitive, but continuing to invest in the stock market is generally a good hedge against inflation because the market tends to outpace inflation. Stocks with low pricing power can be especially effective – even though this is the exact opposite of what investors usually look for. Companies with in-demand products can raise prices any time, and attract exceptional valuations. But when prices are rising everywhere, the weaker, less popular companies can also price more aggressively, and pricing power becomes less important. In such an environment cheap, or “value,” stocks in fiercely competitive sectors such as telecommunications or cable TV become more attractive.
These are just a few of the steps and strategies we’re using with clients to help them outpace inflation. As markets and economic conditions continue to evolve, we’ll continue to update our strategies and help clients adjust to changing and often volatile markets.
Terms and Conditions | Privacy Policy | Disclosures
Case studies are intended to illustrate the types of financial issues faced by actual clients. They should not be construed as a testimonial for or endorsement of Lineweaver Wealth Advisors. They do not represent the experience of any advisory client. Each client’s situation is different, and their goals may not always be achieved. Lineweaver Wealth Advisors, LLC, is not engaged in the practice of law or accounting. Tax information provided is general in nature and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation. Tax rules and regulations are subject to change at any time.
Crain's Cleveland Business is a print and online newspaper delivering local business news and information to Cleveland's business executives, which is published by Crain Communications Inc. The Crain's 2024 list may employ different methodology than described above for similar designations granted in other years. No clients were consulted and no fees were paid to determine the winners; the award is based on assets under management. Neither the participating candidates nor their employees pay a fee in exchange for inclusion on Crain's 2024 List. However, recipients may pay a fee to Crain, an affiliate, or an unaffiliated third party in exchange for plaques or article reprints commemorating the designation. The publication should not be construed by a client or prospective client as a guarantee that they will experience a certain level of results if the recipient is engaged, or continues to be engaged, to provide investment advisory services; and should not be construed as a current or past endorsement of the recipient by any of its clients. Lineweaver Wealth Advisors was ranked in the Top 25 of Crain’s of Cleveland’s annual list of Registered Investment Advisors. The award is based on assets under management in the years 2024. In 2023, Lineweaver Wealth Advisors was ranked in the Top 15 of Crain’s of Cleveland’s annual list of Registered Investment Advisors. The award is based on assets under management in the years 2023. In 2021 and 2022, Lineweaver Wealth Advisors was ranked in the Top 20 of Crain’s of Cleveland’s annual list of Registered Investment Advisors. The award is based on assets under management in the years 2021 and 2022 respectively.
Nominees in the Top 100 Magazine selections are not required to pay a fee for consideration. Individuals appearing in half and full page editorials, have paid a fee for additional exposure. Candidates for consideration are selected utilizing proprietary software. Top 100 Magazine analyzes the results before making their final selections. Financial Professionals and/or wealth managers must also met the following criteria; 1. Be registered with the SEC as a registered investment advisor or a registered investment advisor representative; 2. Have no more than 1 filed complaint with a regulatory agency; 3.Never been convicted of a felony. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the Financial Professional by any client nor are they representative of any one client's evaluation. Participants for the Top 100 in Finance appearance were reviewed in 2022, and recognized in March of 2023. Lineweaver Financial Group appeared in Money magazine in 2015, Fortune Magazine in 2016, WTAM 1100 in 2018, Forbes in 2020, Channel 5 in 2020, and Top 100 in Finance in 2023.
Lineweaver Financial Group ©
Powered by 
Virteom