How Inflation Affects Your Portfolio and the Economy
In this episode, Shamus Madan delves into the recent inflation data, discussing its calculation and limitations. He then explores the Federal Reserve's role in inflation, the economic impact of its financial support withdrawal, and provides investment advice during high inflation. The episode ends with a promotion of MBIT's Twitter account.
Key Points
- The U.S. Bureau of Labor Statistics reported an inflation rate of 4.6%, which is more than double the typical rate of around 2%, indicating a significant increase in the cost of goods and services.
- Higher than average inflation can lower purchasing power, increase borrowing costs, and potentially have long-term negative effects on the currency, which can lead to downward pressure on the market and impact growth expectations for firms.
- Investors should manage their risk appropriately by only risking what they can afford to lose and not succumbing to FOMO, keeping in mind Warren Buffett's advice to be fearful when others are greedy and greedy only when others are fearful.
Hello Everyone, and welcome to the MBIT podcast; I am your host, Shamus Madan. This week we will be discussing the impact of the recently released inflation data on the economy and your portfolio.
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Disclaimer:
The MBIT podcast is reflecting the opinion of only the host. The podcast is for informational purposes only. The podcast is not a research report and is not a recommendation to purchase or sell any stocks, holdings, or securities. The podcast is also not meant to serve as the basis of any investment decision.
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Transcript
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