New Investor's Guide to Inflation & the Inflation Rate

Understanding the Rate of Inflation and Your Portfolio

If your investments earn 7% after taxes but the rate of inflation is 4%, your gain in "real" net worth is only 3%.  That is why it is so important for you, as an investor, to understand inflation, how the rate of inflation influences the value of your portfolio, and what you can do to protect yourself against a high inflation rate.  This guide will walk you through the basics and give you some things to consider.

1
What Is Inflation?

Dollars flow
Oleg Prikhodko/ E+/ Getty Images

Have you ever asked yourself "What is inflation?" If you have, you aren't alone. It is one of the most popular questions I receive from new investors. More

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What Causes a High Rate of Inflation?

What Causes a High Rate of Inflation?

Inflation isn't some magic potion that takes a Ph.D. to understand.  The causes of a high rate of inflation are actually fairly simple.  Take a few moments to learn the two causes of inflation and it can go a long way in giving you peace of mind. More

3
The Rate of Inflation Matters to Your Portfolio

Rate of Inflation and Your Portfolio

Did you know it is possible for you to think you are earning interest income or dividends from your portfolio, pay taxes on that income, but really be losing money each year?  To understand how this is possible, you need to see an example of how inflation can destroy your net worth.   More

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3 Ways to Protect Your Portfolio from a High Inflation Rate

Protecting Your Portfolio from a High Inflation Rate

You don't have to just lie down and watch inflation take away your years of hard work.  There are some steps you can take to protect your savings!  Here are three of the more popular strategies for protecting your assets from inflation ... More

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What Are the Effects of Inflation?

What Are the Effects of Inflation?

There are a handful of tell-tale effects of inflation that, once you understand, can be useful to you in developing an investment strategy. More

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Profiting from Inflation

Profiting from Inflation

Did you know that it is possible to profit from inflation?  History is full of examples of investors who used inflation, which is normally a terrible thing for an economy, to their advantage.   More

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What Is an Inflation Index?

What Is an Inflation Index?

You know that inflation is bad for your portfolio. You know that inflation is bad for your paycheck. But how, exactly, do economists measure inflation? They use something known as an inflation index. Although the math is complicated, the concept isn't. More

8
Why Haven't We Seen Inflation, Yet?

Printing Money and Inflation

A lot of new investors write me and ask, "Why aren't we seeing huge inflation with the government printing money and running huge deficits?".  The answer has to do with something called the M1, M2, and M3 money supply, which is much simpler than it sounds. More

9
One Trick for Estimating the Expected Inflation Rate

Coins and Line Graph
Estimating the Expected Inflation Rate. Tommy Flynn / Getty Images

There is a trick used by professional investors to estimate the rate of inflation the market is expecting in the future.  This can be useful to your financial planning.  It is short, simple, and involves subtracting two numbers from one another.  Find out the trick for estimating the inflation rate ... More

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Series I Savings Bonds

Series I Savings Bonds Can Protect Investors from Inflation

Investors concerned about a rising inflation rate might want to consider Series I Savings Bonds, which are a special type of investment that actually pay more interest income to their owners when inflation rises and less when inflation falls!   More