6 financial planners on what they’re doing with their own investments, as inflation sits at a 40-year high
Amid high inflation, here’s what financial planners are personally doing with their money.
The rate of U.S. inflation hit 7.9% in February, according to government data released Thursday. It remains at a 40-year high. High inflation is, no doubt, concerning to investors with almost nine in 10 adults saying they are at least somewhat worried about inflation, according to a survey conducted in February by the online research firm Momentive for The New York Times. So we asked financial planners: What are you personally doing with your money to combat inflation? (You can use this tool from SmartAsset to get matched with a financial planner who meets your needs.)
Upping his real estate and commodities holdings — Steve Stanganelli, certified financial planner at Clear View Wealth Advisors
“I have been increasing my positions to real estate, both public and private REITS, commodities through physical-backed ETFs and TIPS. Lots of TIPS in lieu of corporate and longer-dated treasuries,” sats Stanganelli.
Investing in I bonds — Lisa Weil, certified financial planner at Clarity Northwest, and Cait Howerton, certified financial planner at Facet Wealth
An I bond is “a savings bond that earns interest based on combining a fixed rate and an inflation rate” and they allow you to “save in a low-risk product that helps protect your savings from inflation,” the Treasury Department explains. I bonds are offered by the U.S. Treasury and the initial interest rate on new Series I savings bonds is 7.12%.
Howerton notes that she invests “in I bonds for 18 months for [about] a 7% return,” in addition to keeping “short-term cash reserves in a high yield savings account” and maintaining “risk-appropriate asset allocation and rebalancing strategy.” She also plans to “use more coupons and keep a budget and buy in bulk when possible to receive a per-unit discount,” she says.
Weil is also a fan of I bonds. “For cash reserves that I’m holding for spending needs a year or more out, I am buying Series I savings bonds,” she says.
Purchasing gold-related securities — Bruce Tyson, wealth adviser at Morton Wealth
“I’ve been buying gold-related securities over the course of the last year as the Fed made it clear that they were raising rates and as inflation prints were coming in hotter,” says Tyson.
Buying stocks — JJ Burns, certified financial planner at JJ Burns & Company
“[I am] purchasing stocks. Stocks have consistently outperformed inflation. Stocks are companies, real companies, that we as consumers buy goods and services we need to live our lives. As inflation increases, companies have a choice on whether they should raise prices to reflect the increase in cost inputs or to eat the additional costs to produce goods. Companies for the most part are increasing their pricing and this means that profitability will likely continue and so will the ratios of continued profitability,” says Burns.
Staying the course, as per her long-term strategy — Bobbi Rebell, certified financial planner and personal finance expert at Tally
“I haven’t made changes to my investment strategy. I believe in a long-term approach so I don’t make short-term changes to my portfolio. In terms of new money, I believe in dollar cost averaging, which smooths out the highs and lows of the market and I’m sticking to that approach,” says Rebell, the author of Launching Financial Grownups.