Financial
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high inflation and rising rates What It Means For You
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ver the past year, the U.S. has experienced a dramatic increase in prices for food, fuel and many other essentials, with the inflation rate hitting a 41-year high of 8.5 percent in March. In response, the Federal Reserve has been aggressively raising interest rates to cool the economy and will likely make more incremental increases through 2023. To put it mildly, it’s a time of economic instability that has households of every income level worried about their financial footing. While some families aren’t necessarily panicking about the cost of gas and groceries, many are concerned about the impact of high inflation and rising rates on their investment portfolios, longterm legacies and previously planned big purchases. Preserving capital, mitigating risk and maintaining purchasing power are all top of mind. There is no perfect approach to navigating through an economic storm, so you should work with your advisor to understand the obstacles and prepare to change course, if only temporarily. 28 | HEIGHTS | July + August 2022
more sophisticated maneuvers and strategies. In order to determine which make the most sense for your unique financial situation, consult your financial advisor. They can help you learn about additional options and work to determine the best strategy with you. Be open to making a change – it just might pay off.
Don’t Neglect Growth While guarding against potential investment losses is prudent, it’s important to balance short-term protective strategies with long-term goals for building wealth. After all, high inflation erodes the purchasing power of funds that arBy Evans Attwell en’t appreciating. Investors need to think Senior Vice President carefully, not only about their own lonFrost Bank gevity and retirement needs, but about the financial legacy they’d like to leave Here are a few thought starters to behind some day. History suggests that, despite inevitable setbacks, the stock further investigate. market remains a reliable generator of Be open to new strategies growth when viewed over the long term. When it comes to investing throughout the year, keeping it simple is usually PULL THE TRIGGER ON PLANNED PURCHASES As interest rates rise, borrowing mona wise approach. But in turbulent ecoey becomes more expensive. So, it may nomic times, like we’re seeing today, inmake sense to move quickly on major vestors may benefit from some slightly
