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Moshkelgosha
Jul 12, 2021 3:43 PM

Expect Higher Inflation, Miracles do not happen overnight..! 

Consumer Price Index for All Urban Consumers: All Items in U.S. City AverageFRED

Description

On May 30th, 2021, I wrote an article about Inflation "Accelerated inflation in the past year entered a new phase!"


Let's see what has happened to inflation FRED:CPIAUCSLsince May 2020:
May 2020:
FRED:CPIAUCSL
Dropped from +1SD to -1SD (in 3 months)


May 2020 - February 2021:
FRED:CPIAUCSL
Passed +1SD once again (in 9 months)


April 2021:
FRED:CPIAUCSL
Passed +2SD


May 2021:
FRED:CPIAUCSL
Passed +3SD


What makes all these data important is the rate of change in the past 4 months!
What is the Rate of Change (ROC)?
The rate of change (ROC) is the speed at which variable changes over a specific period of time.
Today rate of change for inflation is at the highest level since September 2008..!


Several asset classes perform well in inflationary environments.
Tangible assets, like real estate and commodities, have historically been seen as inflation hedges.
Some specialized securities can maintain a portfolio's buying power including certain sector stocks, inflation-indexed bonds, and securitized debt.
Inflation-sensitive investments are accessed in a variety of ways as both direct and indirect investments.

If you are interested to learn more about higher inflation and how it could affect markets read the educational articles:
Educational Article:
Standard deviation:
https://www.investopedia.com/terms/e/empirical-rule.asp
Rate of Change:
https://www.investopedia.com/terms/r/rateofchange.asp
Inflation:
https://www.investopedia.com/articles/investing/080813/how-profit-inflation.asp










Comment

Another Jump in inflation data as predicted..!
Comments
Mihai_Iacob
Best post!Thanks a lot
vmuzic
IMO 7/13 will be around 5.3% anything above 5.5% will be really bad news...will trigger a correction.
mbelasy
What do you think we should do ? I am mostly invested in high growth stocks
Peterson
The Fed is aware of this also , they will reach into their toolbox and retrieve a bucket of soap and water to scrub that writing off the wall . Problem solved , sarc/on .
UnknownUnicorn1020621
Miracles don't happen at all haha.
Moshkelgosha
@WaverVanir, 100% agreed..!
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