General Investing  >  Stay Ahead of Inflation

Stay Ahead of Inflation

 

  • Inflation's Impact
  • Position Your Portfolio
  • Fund Solutions
  • Your Investing Style

Investors Need to Stay Ahead of Inflation.

Inflation can be bad news for investors. It causes a sustained increase in the prices of goods and services and erodes your future purchasing power. In other words, today's dollar won't buy as much down the road. That's why it's important to consider ways to fight inflation in your investment portfolio.

Inflation Is Always a Threat

Since 1960, inflation has averaged 4.2% annually.

Year over Year Inflation Rate 1966-2014 (percentage change in CPI)

Definition: Consumer Price Index (CPI)

Value of $100,000 after ten years at different inflation rates.

Inflation Erodes Purchasing Power

The higher the rate of inflation, the less your dollars will be able to purchase.

Is Higher Inflation on the Horizon? What Can You Do?

A whole host of factors are currently constraining inflation, but U.S. monetary and fiscal policies and a number of global economic imbalances suggest high and rising inflation could be on the horizon. But because it's impossible to predict inflation outcomes, we suggest a modest, permanent allocation to inflation-hedging investments.

Scale Inflation Hedges to Match Your Risk.

Retirement is when investors face the greatest inflation risk because they need to fund the greatest amount of time in retirement, and typically aren't making regular contributions to offset declines. How much of an inflation hedge could you need?

Read more on Guidelines for Adding Inflation Hedges in Your Portfolio 

Three Approaches to Add Inflation-Hedging Assets to Your Portfolio.

When you've determined how inflation might affect your portfolio in the future, we offer three approaches, depending on how you want to manage your investments and how your portfolio is currently positioned:

  1. Diversified Approach: Does your portfolio need diversification as well as inflation-hedging components?
  2. Comprehensive Inflation Approach: If your portfolio is already diversified, do you want an "off-the-shelf," single-fund inflation option to add to your existing investments?
  3. Individual Approach: Would you prefer to buy individual stock and bond funds that invest in inflation hedges to complement your existing

Read more on Integrating Inflation Hedges into Your Portfolio 

Learn more about the fund solutions we offer to help you hedge against inflation risk.

Diversified Approach

American Century Investments® Asset Allocation Portfolios: A mix of stock, bond and money market funds in a single fund; inflation-hedging investments are already built in to these broadly diversified portfolios.

Individual Fund Inflation Approach

Real Estate Fund2,3, Global Gold Fund3, Short Duration Inflation Protection Bond Fund and Inflation-Adjusted Bond Fund4: Individual inflation-hedging funds that you can mix and match to add to your existing diversified portfolio.

We understand each investor is unique, and your needs may vary. Our goal is to help you, no matter what your investing style.

How Do You Want to Manage Your Investments?

  • Do It Yourself
    Use our Inflation-Hedging Fund Solutions  to help identify potential investments to add to your portfolio and research more information on each fund.
  • We Can Help
    Whether you like to research first or have questions you need answered now, take advantage of our guidance by scheduling a free consultation. Or call us at 1-800-345-2021.
  • We Can Do It for You
    Our time-based and risk-based asset allocation portfolios offer a professionally managed and diversified investment approach. Both portfolios hold investments that factor in inflation risk. Compare both portfolio types.

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2

Understanding inherent risks such as interest rate fluctuation, credit risk and economic conditions are important when considering an investment in real estate.

3

Due to the limited focus of these funds, they may experience greater volatility than funds with a broader investment strategy. They are not intended to serve as a complete investment program by themselves.

4

The prospectus contains very important information about the characteristics of the underlying security and potential tax implications of owning this fund.

Diversification does not assure a profit nor does it protect against loss of principal.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.