PLANADVISER - September/October 2020 - 34
investment-oriented
Inflation Protection for DC Investors
TIPS? REITs? Infrastructure stocks? What inflation-sensitive assets will help this time?
" T
here is no subtler, no surer
means of overturning the
existing basis of society than
to debauch the currency, " wrote economist
John Maynard Keynes in 1920. " The
process engages all the hidden forces of
economic law on the side of destruction,
and does it in a manner which not one
man in a million is able to diagnose. "
Those may seem overblown and archaic
words, especially in view of the low
inflation prevailing in the U.S. for the
past 20 years-above 3% annually just
four times, and under 2% for eight years.
But a regime of higher inflation
and more volatile price swings may be
in store. On August 27, Jerome Powell,
chairman of the Federal Reserve,
declared that the central bank will
adopt a new policy toward inflation-
one that gives a higher priority to its job
of maintaining employment. And rather
than immediately counteracting any
inflation that appears on the economic
horizon, the Fed's new policy states:
" [F]ollowing periods when inflation has
been running persistently below 2%,
appropriate monetary policy will likely
aim to achieve inflation moderately
above 2% for some time. "
While Powell has not promised
higher inflation, he will allow it in order
to sustain economic recovery. Accordingly,
sponsors of defined contribution
(DC) plans and their advisers should
take a fresh look at the prospect of
rising inflation and what effects it
could have; identify which participants
need the most protection; and assess
the priority, and the cost, of protection
for their plans' investment offerings.
Looking Out For Near Retirees
The need for inflation protection is
especially acute among those in or near
retirement: those at the end of their
earning years, unable to catch up to
rising prices through salary increases
and typically guided to more conservative,
lower-return
investment strategies.
" What's needed is protection from
34 | planadviser.com September-October 2020
Art by Bill Mayer
http://www.planadviser.com
PLANADVISER - September/October 2020
Table of Contents for the Digital Edition of PLANADVISER - September/October 2020
A Careful Inspection
2020 PLANADVISER Retirement Plan Adviser Survey
Keeping Clients Safe
Cures for Virtual Meeting Fatigue
Inflation Protection For DC Investors
How to Show Your Worth
Never Too Late
A Return to Rollover Advice
Whether—And How—To Vote Proxies
PLANADVISER - September/October 2020 - Cover1
PLANADVISER - September/October 2020 - Cover2
PLANADVISER - September/October 2020 - 1
PLANADVISER - September/October 2020 - 2
PLANADVISER - September/October 2020 - 3
PLANADVISER - September/October 2020 - 4
PLANADVISER - September/October 2020 - 5
PLANADVISER - September/October 2020 - 6
PLANADVISER - September/October 2020 - 7
PLANADVISER - September/October 2020 - 8
PLANADVISER - September/October 2020 - 9
PLANADVISER - September/October 2020 - 10
PLANADVISER - September/October 2020 - 11
PLANADVISER - September/October 2020 - A Careful Inspection
PLANADVISER - September/October 2020 - 13
PLANADVISER - September/October 2020 - 14
PLANADVISER - September/October 2020 - 15
PLANADVISER - September/October 2020 - 2020 PLANADVISER Retirement Plan Adviser Survey
PLANADVISER - September/October 2020 - 17
PLANADVISER - September/October 2020 - 18
PLANADVISER - September/October 2020 - 19
PLANADVISER - September/October 2020 - 20
PLANADVISER - September/October 2020 - 21
PLANADVISER - September/October 2020 - 22
PLANADVISER - September/October 2020 - 23
PLANADVISER - September/October 2020 - 24
PLANADVISER - September/October 2020 - 25
PLANADVISER - September/October 2020 - Keeping Clients Safe
PLANADVISER - September/October 2020 - 27
PLANADVISER - September/October 2020 - 28
PLANADVISER - September/October 2020 - 29
PLANADVISER - September/October 2020 - Cures for Virtual Meeting Fatigue
PLANADVISER - September/October 2020 - 31
PLANADVISER - September/October 2020 - 32
PLANADVISER - September/October 2020 - 33
PLANADVISER - September/October 2020 - Inflation Protection For DC Investors
PLANADVISER - September/October 2020 - 35
PLANADVISER - September/October 2020 - How to Show Your Worth
PLANADVISER - September/October 2020 - 37
PLANADVISER - September/October 2020 - Never Too Late
PLANADVISER - September/October 2020 - 39
PLANADVISER - September/October 2020 - 40
PLANADVISER - September/October 2020 - 41
PLANADVISER - September/October 2020 - A Return to Rollover Advice
PLANADVISER - September/October 2020 - Whether—And How—To Vote Proxies
PLANADVISER - September/October 2020 - 44
PLANADVISER - September/October 2020 - Cover3
PLANADVISER - September/October 2020 - Cover4
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