Inflation

A sustained increase in the general price level—often measured by a broad index such as the consumer price index (CPI).

Zvi Bodie on the Safety of Stocks in the Long Run

The notion that stocks are risky in the short-run but safe in the long run is a dangerous financial fallacy according to Boston University professor Zvi Bodie.

Professor Bodie has been communicating this view consistently for many years, and the financial crisis has provided strong support for his argument.

The gist of Bodie's view involves that impact that equity market...

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Sequence of Returns Risk

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Consider Inflation Protected Immediate Annuities for Estate Planning

Financial planning and estate planning have been brutally difficult over the past decade. High levels of market volatility , the possibility of deflation , and now threats of inflation have complicated the financial lives of millions of people. Almost anyone in or nearing retirement is faced with incredibly complex decisions. If, for example, you retired in 2000 yet remained fully invested in the S&P 500 you would have watched well over a third of your retirement nest-egg evaporate. Do you...

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Inflation Protected Immediate Annuity

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Inflation Protected Immediate Annuity

Why Is Teresa Ghilarducci Considered "The Most Dangerous Woman in America"

Teresa Ghilarducci is a 51 year old economist who directs the Schwartz Center for Economic Policy Analysis at the New School in New York.

Why was Ghilarducci--who sure looks like a nice person in her picture--labeled the most dangerous woman in America in a recent US News & World Report column?

The short answer is that she thinks...

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More on the Bond Vigilantes and Inflation Expectations

As mentioned recently , global investors have been signaling their unease with the U.S. budget deficit by selling bonds and subsequently driving up yields on U.S. debt. The U.S. government's decision to employ trillions of dollars in deficit spending as a way to try and kick-start the economy has resulted in higher inflation expectations and higher borrowing rates on everything from mortgages to credit card debt. The yield on 10 year Treauries has increased 1.5% from the start of the year. This...

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Inflation

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Obama Administration

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Bond Vigilantes Return with Inflation on Horizon

Yields on the 10 year Treasury have been climbing consistently over the past several days, ending above 3.7% today. Increasing interest rates are welcomed by insurers and consumers who are still considering an annuity purchase. The trend is troublesome, though, for those who have recently locked themselves into a fixed annuity without inflation protection. Similar to the 1970s and 1980s, global investors are driving up interest rates in light of concerns about inflation that could be ignited by...

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