A-05Article

Inflation and your portfolio

Inflation erodes purchasing power. Assets respond differently—none is a perfect shield.

Filed under: Macroeconomic context
Reading time: 1 min read
Instrument: T-07
Assumptions: Stated in the notes

Contents 6 sections

In depth

Cash feels safe day to day but loses ground when prices rise. Stocks may help over long periods but can fall sharply in the short run. Bonds can stabilize a portfolio but may struggle when rates rise quickly from low levels. Real assets like real estate or commodities can help some investors, with their own cycles and costs. The right answer depends on your goals, taxes, and timeline. Use articles and tools here to think through trade-offs, not to pick a one-size-fits-all basket.

Key points

No single asset solves inflation in every year.
Match assets to when you need the money.
Taxes change net results.

Worked figure

Fig. 1What $100 buys at an assumed 3% inflation

After	Buying power	Scale
Today	$100.00
10 years	$74.41
20 years	$55.37
30 years	$41.20

Arithmetic: $100 ÷ 1.03 to the power of the years. The 3% rate is an assumption, not a forecast. Change the rate in the inflation impact calculator.

Run the numbers

T-07Inflation impact calculatorChange the inputs and read the result. It runs in your browser.

Not investment advice

Articles and calculators on this site are for learning. They are not a recommendation to buy or sell any security, and they are not tailored to your personal situation.

Education vs personal advice. If you work with an adviser, that relationship has its own agreements and disclosures. Reading here does not replace that.
No outcome guarantees. Markets are uncertain. We write to explain ideas and trade-offs—not to promise returns or timing.