Price inflation is back, if the pundits have it right. Until very recently the financial media was awash in warnings of “deflation.” Now, in the face of rising energy and food prices, and with statistical indicators increasingly pointing toward stronger economic growth, price inflation is back in the news. In our view, monetary inflating is all but certain in the absence of sound monetary policy, so all investors should have inflation protection built into their portfolios. But it is equally important, especially for older investors, to understand how inflation is measured in order to understand how it affects them.

As reported in the January 12, 2004, Research Reports, published by our parent, the American Institute for Economic Research (AIER), the Consumer Price Index (CPI) is far from perfect as a gauge of price inflation. Nevertheless, it is regarded as the best measure available, and is widely reported in the media as the rate of inflation; it is in fact used explicitly in cost-of-living

Price inflation is back, if the pundits have it right. Until very recently the financial media was awash in warnings of “deflation.” Now, in the face of rising energy and food prices, and with statistical indicators increasingly pointing toward stronger economic growth, price inflation is back in the news. In our view, monetary inflating is all but certain in the absence of sound monetary policy, so all investors should have inflation protection built into their portfolios. But it is equally important, especially for older investors, to understand how inflation is measured in order to understand how it affects them.

As reported in the January 12, 2004, Research Reports, published by our parent, the American Institute for Economic Research (AIER), the Consumer Price Index (CPI) is far from perfect as a gauge of price inflation. Nevertheless, it is regarded as the best measure available, and is widely reported in the media as the rate of inflation; it is in fact used explicitly in cost-of-living.

Also in This Issue:

Fixed-Income Investment Strategies
Behavioral Finance
The High-Yield Dow Investment Strategy
Recent Market Statistics
The Dow-Jones Industrials Ranked by Yield