I had a conversation with an older gentleman at our church earlier this year and I was explaining to him how I felt like Emily and I could not catch-up on the home-front. There always seems be a diaper to change, something to fix, someone getting sick, someone to feed, kid activities to attend, and the list goes on. This man also had 3 children but all of his kids were in high school so he had some perspective that I found very insightful. He said that this crazy season of life that we are in right now will not last forever. He went on to say that “these are the good ‘ol days” and encouraged me to try to cherish and enjoy this season of life even on the hard days. I found that to be wise counsel and realized that I was anticipating this crazy season would last forever.
In a similar fashion, inflation has dominated news headlines this year and many investors feel like these high levels of inflation will last forever. While we share your concern with the current level of inflation, we thought it helpful to review the Consumer Price Index (CPI) over the past 70+ years during inflationary periods.
Consumer Price Index (CPI) from 1948 - Present
The red periods above represent inflationary environments in our country. As you can see, these periods happen abruptly and they have always been followed by a sharp reversal as inflation moves lower. It is also worth comparing the length of time that each inflationary period lasted. As you can see, these periods have lasted anywhere from 22-28 months. As a point of reference, we are 25 months into this inflationary period.
As the old saying goes… History does not repeat itself but it often rhymes. Because of this, we expect that inflation is in the process of peaking and should start moving lower later this year.
About the Author
Matt Price serves as a Partner and Director for The Price Group of Steward Partners. He resides in Houston with his wife, Emily, their three children and "Fisher" the family golden retriever. Matt studied at the University of Pennsylvania – Wharton School of Business for his Certified Investment Management Analyst (CIMA®) designation after receiving his undergraduate degree from the University of Tennessee - Knoxville. Over the past 11 years, Matt has helped families make high quality, common sense decisions regarding their wealth and their legacy. Matt firmly believes everyone needs a wealth coach!
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