Todd Rosenbluth, head of research at VettaFi, discusses whether the Fed has control over inflation and can avoid a recession in the “Claman Countdown”.
Whether you’re paying more for gas or groceries, prices for essentials are increasing, and everyone is feeling the pressure. This is inflation.
“Simply put, inflation is an increase in the price of goods and services that corresponds to a decrease in the purchasing power of consumers,” explained Ashley Tran, assistant manager of the Fidelity branch in Tampa, Florida.
If you want to keep investing to weather the storm, Exchange-traded funds, or ETFs, It can be a wise investment choice.
How does inflation affect global markets?
While US inflation hit a 40-year high in May, Tran said it’s not the only country that has seen rising costs. She noted that the increase in gas and food prices in the wake of the Russian invasion of Ukraine led to high inflation around the world.
Advice for first time ETF buyers
Traders work on the trading floor of the New York Stock Exchange in Manhattan, New York City, August 2, 2022. (Reuters/Andrew Kelly)
“International investors face a number of financial risks in times of inflation,” Tran added.
Why ETFs?
ETFs are baskets of securities that are traded like stocks on a stock exchange.
“They provide investors with access to underlying investments, such as stocks or bonds, and generally provide more diversification than individual stocks or bonds,” Tran said.
Why are ETFs wise if inflation is on the rise?
during times market instability And inflation is rising, Tran noted that ETFs are a smart option to consider for portfolio diversification.
ETF stands for Exchange Traded Funds. (illustration iStock/iStock)
“It’s also important to remember your long-term savings strategy, especially in times of inflation and market instability, to help your investments grow over time,” she said.
Are ETFs a factor in inflation, and are they less risky?
Since ETFs track a specific sector or index, there are ETF options that hedge against inflation.
“Overall, ETFs are a great option, especially when compared to leaving your money in a traditional savings account, where a diverse asset mix will help your investments grow over time,” Tran added.
Why ETFS is a good investment value
People shop for frozen foods at a convenience store in Rosemead, California, June 28, 2022. (Frederick J. Brown/AFP via Getty Images/Getty Images)
Do ETFs Offer Investors Less Risk?
Tran said that ETFs help in diversifying an investment portfolio, which reduces one’s level of risk and also builds a balanced strategic asset allocation. stocks and bonds. She added that ETFs are good investment vehicles to consider during high inflation and market volatility.
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What to consider regarding ETFs and inflation
Says Todd Rosenbluth, Head of Research at VettaFi Commodity-focused ETFs Especially useful during times of inflation.
“The price of gold, energy and agricultural products tends to rise during periods of high inflation, and ETFs provide easy, low-cost access,” he said.
| ribbon | protection | else | they change | they change % |
|---|---|---|---|---|
| GLDM | SPDR Gold Minishares TRUST | 34.97 | -0.20 | -0.58% |
| PDBC | INVESCO ACT MANAGE EXCH TR CMDTY FD OPTIMUM YIELD DIVERSIFIED C | 17.16 | -0.09 | -0.52% |
| PPI | TR II AXS ASTORIA INFLT SENSITIVE INVESTMENT MANAGER SERIES | 24.73 | -0.32 | -1.28% |
| INFL | The horizon kinetic inflated confidence fund was incorporated | 30.60 | -0.32 | -1.03% |
Rosenbluth added that ETFs such as the SPDR Gold MiniShares and the Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF are two examples.
Travel ETFs offer exposure to the fast-growing industry
In addition, he says there are more diversified ETFs such as the AXS Astoria Inflation Sensitive ETF and the Horizon Kinetics Inflation Beneficiaries ETF.
“These ETFs are actively managed and provide exposure to stocks that can do well in times of inflation,” Rosenbluth added.