A few weeks ago, I wrote a quick blog on inflation, and it stirred quite a response from our readers.
Most of the responses we have received from our readers about that blog, have had questions about how inflation may affect their financial goals and their investments.
"What do we do now?" is a prevalent question that we hear.
Once again, I chose not to listen to a narrative that could rely on some silly anecdotal evidence as to how an investor can overcome the devastating effects of inflation. I chose to reflect on what history has taught investors. The history lesson that reverberates with investors is this: Don't ever count out the great companies of America, and their ability to obliviate inflation back into the stone ages.
Take a look at the chart below to see exactly how, not only in underlying price performance, but in the rising cash payouts of those great American companies (otherwise known as dividends), have fared against the backdrop of inflation during the last 30 years:
Even Stevie Wonder himself, could see the results in this chart - the great companies of America (represented by the S&P 500) have tuned inflation into dust.
It's not a narrative and it's not an agenda, it's history and history is factual, the future is not. And while I know not of what the future holds in regards to what the S&P 500 will do in performance or dividends, I choose to look at the facts of the history to be a guiding light for the future.
Owning some of the great companies of America, may give you a head start in the race against inflation. It's there to see if you only take the time to look.
Thanks for reading.