Inflation Is Rising... Here's How to Invest

We love finding great investments...

We spend every day digging into businesses and finding ones with consistent underlying returns they can deliver to investors.

But that's not working just now. Instead, it's still about the Federal Reserve, inflation, and the overall outlook for risk.

Even the best business has risk... And if investors decide they don't want risk – or, more precisely, they are willing to pay less for risky assets – then any stock investment is swimming against the tide.

Most folks right now are worried about what inflation will do in the future and what it means for investments.

It's often claimed that inflation only comes from the debasement of a currency through money-printing or other vast increases in the money supply.

But the truth is that analyzing inflation is difficult. No one – not politicians, economists, central bankers, or hedge-fund wizards – fully understands it. It comes from complex interactions between monetary and fiscal policies, the financial system, and the expectations of everyday people.

Inflation is a 40-year high. To fight back, last week, the Federal Reserve raised interest rates by 0.75% for the second consecutive month.

We've warned of the Fed using a swift and heavy hand to attempt to tamp down inflation. But some folks are worried about the phenomenon known as "hyperinflation." This happens when runaway prices turn a currency worthless.

We don't expect things to get that bad... Our modern monetary system isn't perfect, but policymakers have a simple remedy for inflation: higher interest rates from the Fed.

The problem is that higher interest rates slow the economy and push down stock and bond prices. That makes it tough to find new investments or even protect your existing wealth.

However, in our latest issue of Income Intelligence, we detailed a little-known investment that gives you an opportunity to make money as markets rise while providing you protection in case the bottom falls out of stocks.

If you're not already an Income Intelligence subscriber, click here to learn more. (Current subscribers can read it here.)

Here's to our health, wealth, and a great retirement,

Dr. David Eifrig and the Health & Wealth Bulletin Research Team
August 6, 2022

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Reader question of the week...

Q: What do you think of a headache after drinking alcohol? – F.H.

A: One of the main causes of a headache after drinking alcohol is dehydration. That's why my rule is to drink one glass of water after every glass of alcohol.

Wine in particular can cause headaches from two other triggers...

The first... a substance called "histamine." If you have seasonal allergies, your wine headache could simply be a reaction to the histamines in wine.

An easy solution is to take an antihistamine before imbibing. Be sure it's a non-drowsy version of the medication – you shouldn't mix Benadryl with alcohol for this reason. But other over-the-counter antihistamines like Claritin and Allegra don't interact with alcohol. (Remember, you can always check drug interactions on trusted websites like Drugs.com.)

Second, "tannins" can also cause wine headaches. Tannins are types of molecules found in grape seeds and skins. They're also in oak. Because red wine ferments with grape skins, it contains tannins. White wines aged in oak can also have tannins.

If you think your headache comes from tannins, try cutting back on other tannin-rich foods like dark chocolate, tea, cinnamon, pomegranates, walnuts, and red beans. And if you want to avoid tannins in wine, try white wines that are not aged in oak.

Keep sending your questions, comments, and suggestions our way. We read every e-mail... feedback@healthandwealthbulletin.com.

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