Nathan Worden's avatar
$334.1m follower assets
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Inflation in the United States has reached a four-decade high
According to data released by the U.S. Labor Department July 13th, inflation is at a four decade high:

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Fuels, fertilizers, foods, and industrial inputs are all much higher.

Some causes:
  • Increase in money supply
  • China's Zero Covid lockdowns
  • The Russian invasion of Ukraine
  • Mass baby boomer retirement

I made some pretty big changes in my portfolio today because inflation has few places to go but up.

I've been far too slow to adjust, and locking in some heavy losses doesn't feel great.

But my portfolio needs to acknowledge that the traditional tools at central banks' disposal to tackle inflation are unlikely to have the same impact that they might once have had.

Inflation is anything but transitory.

I'm needing to factor in the possibility that relief is not going to come in weeks or months, but years.

I'm still saying mostly long— thankfully the fundamentals of the American economic system remain sound. Demand remains strong, even for non-essentials like flights, restaurants, and movies.

But it was time to have more cash on hand.
Jensen Butler's avatar
Appreciate the transparency, as always. Far too slow on my end as well. And I’m still just bag holding…admitting when you’re simply pot committed rather having a remaining justified bull stance is something I’ve been reflecting on lately. What was the immediate mental impact once this portfolio shift was made?
Nathan Worden's avatar
@jensen I love that question— my immediate mental reaction was relief. If stocks go back up really quickly I still would need a larger cash position simply because I recently moved, got a mortgage, and need more of a buffer. You know you're making good choices if you set yourself up to still happy even if the negative outcome of a decision comes to pass.
Jensen Butler's avatar
@nathanworden amen to that!
Investor from Nepal 🎄's avatar
I hope your cash in had will be useful soon ;)
It seems it will soon ;)
Nathan Worden's avatar
@investor_from_nepal Hope so too— but also probably needed to have more of an emergency fund anyway :)
Investor from Nepal 🎄's avatar
@nathanworden may you never need to use your emergency fund 🤞🏾
Nathan Worden's avatar
@investor_from_nepal that’s like the perfect investing blessing.

Like: “May the road always rise to meet your feet”

“May you never need to use your emergency fund”

Put that on a home goods sign and I’d buy it and hang it in a wall in my house ☺️

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