Announcer:
4 Your money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Thanks, Brandy. Appreciate it.
Brandy Auterson-Hurst:
So with inflation still a major concern, what’s one of the best ways for investors to protect their purchasing power?
David Nelson:
Boy, it’s an important point and many people, I guess when we think about inflation, they think in terms of the assets as far as stocks, real estate, commodities, that type of stuff. And they ignore what we believe is a really, really overlooked area, and that is the income that these assets can or can’t generate for us. So I brought along a chart today to illustrate, I think really well this concept and the importance of it as far as cash flow. And what we see here are three different lines. The top line is the S&P 500 and the dividend flow coming from that. The red line is looking at wages, which is an interesting comparison here as far as looking at people’s wages. And then the white line is looking at inflation, CPI Index.
What we see during this period of time is a dramatic difference as far as between the numbers. We’re talking about numbers from 584% as far as for the dividend flow, to 192% as far as for the red line, which is looking again at wages. And then the bottom line is inflation. So really important points when we’re talking about money and future cash flow.
Brandy Auterson-Hurst:
Okay, so what does this mean for investors going forward?
David Nelson:
Well, I think the key takeaway is really simple and it’s looking at do we want to outpace inflation? And if we do, there’s very few assets that historically have done that. No assurance, no guarantees as far as that it’s going to happen each and every year, but when we look over these long periods of time, stocks seem to be a real valuable tool.
Brandy Auterson-Hurst:
If you missed any of our discussion, we’ll make it available for you on ourquadcities.com.
Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.
Indices mentioned are unmanaged and cannot be invested into directly.
This video includes a paid appearance.