A Comment -- General Comments From an Expert (A Commentary)

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Decade’s high inflation has been forcing Central Banks to tighten monetary conditions expeditiously, which in turn has forced equity valuations and demand lower, and to the Central Banks, the public enemy number one is inflation. We feel that if we begin to see any consistency in the flattening or decline of inflation in the second half that this will give the Central Banks good reason to adjust their expectations for monetary tightness, and in turn, this will ease demand destruction and valuation suppression on the financial market’s front. Unlock Premium - Try 5i Free

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. The Importance of Investing Even in the Tough Times. We can see that while both the US and Canadian dollars have averaged a low annual rate of inflation over the past 34 years (2.6% and 2.1%, respectively), these small erosions to purchasing power make a substantial difference over the long term. The same principle is applied to investing – while the TSX only returned a 3.1% annual real return and the S&P 500 a 5.5% annual real return over the past 34 years, this has amounted to a 6X (~$3.0 / $0.5) and 15X (~$6.0 / $0.4) out performance, respectively, above the dollar. Unlock Premium - Try 5i Free

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. The Effects of Inflation. Inflation, by definition, can be described both by as an erosion of the purchasing power of the dollar, or as an increase in the price of goods and services. By investing in the financial markets, individuals can earn a return over the long-term that is above the rate of inflation, and thereby having a low time preference and increasing their wealth after the effects of inflation. Unlock Premium - Try 5i Free