Inflation Is Here to Stay. Here’s How to Adjust Your Portfolio.

Inflation is rampant and ubiquitous today, from the gas pump to the grocery store. The U.S. consumer price index has quadrupled in the past year, from a 1.7% annual rate in February 2021 to 7.9% this past February, a 40-year high.

Consumers aren’t alone in feeling the painful impact of higher prices. For a generation of investors who rarely had to worry about inflation eroding their wealth, the past year’s spike marks a major change—and ought to prompt a re-evaluation. Specifically, investors should consider adjusting their bond and stock holdings to manage inflation’s impact, while adding commodities and real assets to their portfolios.