2nd Quarter 2018 Commentary
A number of clients have been asking about inflation: are the recent numbers, 2%, benign? Encouraging? Cause for concern? Some of the answer depends on whether the reported inflation data are even real. The changes, over time, in the way that the sausage that is the Consumer Price Index is made seem, repeatedly, to have the effect of lowering it. Either way, it’s well neigh impossible to avoid earning a negative rate of return from the various bond ETFs, after taxes and inflation. We provide a brief survey.
Then there is the failure with, now, a 20-year record, of the equity ETFs to provide the expected 10% rate of return. To avoid a continuous loss of purchasing power, which adds up pretty quickly, investing has to take place differently and elsewhere.