As the economy continues to recover from the effects of the pandemic over the past year, you may have noticed the term ‘inflation’ coming up in the news. But don’t let it scare you! We've seen year over year inflation at elevated levels as a result of record pandemic lows from this time last year. As we begin to extrapolate data points over time, we will see a normalization of inflation levels. The fact is, some inflation is good because it means the economy is bouncing back.
“Bouncing back” is exactly what it sounds like; stock and bond prices may show some volatility in the short term, as the market and the economy adjust to find a new equilibrium. That’s why, like always, it’s best to stay focused on your long-term financial goals rather than worry over any short-term noise.
Still, it’s reasonable to be well-informed about inflation, so if you’re interested in learning more, we’ve assembled a few trustworthy resources below that help put inflation in economic and historical context.
Most importantly, don’t let today’s headlines distract you from tomorrow’s goals. As Warren Buffet once said "The stock market is a device for transferring money from the impatient to the patient."