There are also mutual fund and ETF strategies geared to providing long-term total returns that outpace inflation, such as those that invest in commodity-related equities from energy, metals and mining, chemicals, and agricultural-related companies. On the conservative side, TIPS (Treasury Inflation Protected Securities) have the backing of the U.S. government, and their principal is indexed to inflation; however, this may not be the most suitable idea for younger investors. Fortunately, for younger investors that are concerned about inflation, keeping a long-term perspective on what has typically been a shorter-term event can help them weather the storm.
While younger investors may be at a disadvantage from an experience perspective with regards to inflation, they do have both history and time on their side. There are a lot of factors and forces that drive markets, so it’s always recommended that investors of all ages and generations talk to a financial professional. Today it might be to ask for help navigating through this current era of high inflation, but tomorrow it might be about how to plan, invest and save for the future.
* “Younger generations” or “younger investors” refers to Gen Z (Age 18 – 25) and millennials (Age 26 – 41). “Older generations” or “older investors” refers to Gen X (Age 42 – 57) and baby boomers (Age 58 – 76).
Joe Boyle is a fixed income product manager at Hartford Funds.