With two decades of low inflation, retail investors may be dangerously letting their guard down, Invesco Solutions Chief Investment Officer Duy Nguyen said in a blog Wednesday.

He noted pre-retirees and retirees are especially vulnerable to inflation because it can substantially reduce their standard of living in retirement if their portfolios fail to keep pace.

“Inflation should be viewed as a long-term challenge that can hurt portfolios whether inflation is high or simply above average. Even slightly above-average inflation can significantly erode wealth over time,” said the Invesco expert.

Investments that have performed during high inflation include commodities and real estate investment trusts, he noted.

He said portfolios should have flexibility to allocate investments across a wide spectrum of asset classes that have the greatest potential to outperform inflation.