2021 Mid-Year Market Review
It seems as though inflation, hyper-inflation in fact, is the latest worry that is on everyone’s mind.
While the US hasn’t experienced a period of high inflation since the late 1970s, is it possible that we are in the beginning stages of an inflationary cycle?
Maybe, but like many things related to the economy and the financial markets, it depends on who you ask. Here are a few examples of recent headlines:
Hiring shortages, inflation pose fresh risk to US economic recovery, CFOs say” - Fox Business News
“Deutsche Bank warns of global ‘time bomb’ coming due to rising inflation” - CNBC
“Inflation likely temporary” - Goldman Sachs
“Strategists still don’t think inflation is a problem for stocks” - Yahoo Finance
So, given current economic conditions, should we prepare for the next inflationary cycle? Are there any actions that need to be taken that can protect us financially from an environment of rising prices and economic uncertainty?
The answer to this question is a resounding yes—and the good news for Beacon clients is that you are already prepared! That’s right, if you are a Beacon client you should feel confident about the following:
You have a portfolio that is diversified enough to not only endure periods of inflation, but other economic scenarios that could play out over the course of your lifetime.
Your portfolio is structured in a low-cost and tax-efficient manner that is consistent with your risk profile and considers any anticipated cash flow needs that are on the horizon.
You are taking full advantage of any financial planning opportunities that exist (or may eventually present themselves).
That’s right, you are already prepared to withstand a period of higher than normal inflation, lower than expected investment returns, higher tax rates and a whole host of other “worst case scenarios.” In addition, should any of these unexpected scenarios begin to play out, you are in a position in which adjustments can be made to increase your probability of a successful outcome as it relates to your financial goals.
We hope that you find comfort in knowing that you have taken all those measures under your control to be prepared for the inevitable uncertainty that the future holds and we thank you for your continued confidence and partnership.