Daily Data
Is inflation all in our heads? This piece from Neil Irwin in The New York Times suggests it might be. Perception of cost, based on what it is you're actually buying, can certainly play a part in how you might be interpreting the rate of inflation.
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We complain because gas prices have surged 74% over the pandemic low in May 2020. We conveniently forget the continued high prices of 2011-2014.
But, then again, the article reminds us, gas prices are on big, shiny signs round every corner.
What about other things? The Consumer Price Index is up 5.4 from last year, sure. But Americans have 50% more in their checking accounts than in 2019 and $2.3 trillion more in savings.
Irwin writes, "The reasons [for inflation gripes] seems to be tied to the psychology of inflation and the ways people assess their economic well-being."
Irwin also points to "the uneven effects that rising prices and shortages have on different families" and the "psychological scars of the pandemic."
It's an interesting case against further hyping up the role of inflation in our economy. You can read the full article for yourself here.
How Inflation Plays Into the Investment Equation
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Let's take a step back to Econ 101.
Investors have a vested interest in the economic conditions of the day, regardless of strategy or asset classes. While the past does not dictate the future, it does provide us with valuable indicators as to the possible twists and turns of the market.
Understand the past and get well-acquainted with the present. It will help you make the most informed investment decisions possible.
The Take
Aristotle said it best: "The mark of an educated mind [is] to be able to entertain a thought without accepting it." Worried you might be literally buying into the hype? Keep this guide on hand to help you think it through.
Click the picture above to download the Take of the week!
The Word
Check out our recommended reading for the week:
- The days of cheaper rentals are over (Axios)
- Prices are going up, but so is rental activity. How does it all shake out for you and the markets you're in?
- Why should you care? We're less worried because the Sun Belt market has been going strong. Pay attention to what soaring rental prices means for you and your investments.
- The $300m flip flop: how real-estate site Zillow's side hustle went badly wrong (The Guardian)
- Everyone's in the investment game, but not everyone wins.
- Why should you care? Zillow's buying spree sent a ripple through the market. Their house dump is going to do the same.
- Money laundering more prevalent in real estate than anywhere else (Miami Herald)
- We're not here to scare you, but real estate is as full of shady corners as any other industry. You need to know what you're up against, especially if you're new to investing.
- Why should you care? This is a particular sip of Kool-Aid you REALLY want to avoid.
