Reason for Optimism: Stocks, Inflation & Grandpa

By The Advocates

Perhaps its just my group of older folks, but I’ve spent decades listening to their worries over money, the markets, the future in general.

The outlier was Grandpa Loren (great grandpa, to my kids). Oh, he had plenty to say about money, but he did it with a cheeky grin and in good spirits.

His favorite prediction was that we would have what he called “in-fuh-lation”, that’s inflation, for those who don’t speak Oklahoma truck driver, and he was sure it was imminent, from our first meeting in 2000 to his death in 2021.

In a strange way, it’s sad he didn’t live to see his prediction fulfilled. Nevertheless, Grandpa survived the Great Depression and every single recession over the last 100 years, and seemed to flourish by living simply and adopting a great attitude, saying he was grateful that he was able to wake up, wiggle his toes and find them free of tags.

Did I mention he was 95 when he passed?

The recent inflation wouldn’t have kept him down, but those needing something more solid to generate that kind of optimism may enjoy Dimensional’s one-pager showing a review of 30 years of stock returns versus inflation.  

Historically, inflation hasn’t been all bad news for stocks as their returns have tended to outpace it over time, providing yet another reason for us to preach about discipline in long-term investing.

Inflation, though painful, is typically short-term. You shouldn’t abandon your financial plan or be coaxed in reactionary moves because of it.  Voices that encourage you to do so either don’t have the evidence, or don’t have your best interest in mind.

See the evidence. Get started on a financial plan with us. Schedule your free, no obligation appointment today.