Inflation is a Predictable Risk

Sep 1996 //
Risk vs. Volitility
Inflation

Over the shorter term stocks are unpredictable and so present risk.  Over the longer term inflation is all too predictable, and it presents the most meaningful risk.  Simply put, risk is best expressed by the possibility of not achieving our goals rather than by some overused “beta” coefficient.  Over the long term, stocks have overcome inflation risk much better than bonds…