Motley Fool Money Investors Shrug Off Inflation Fears
Jul 13, 2022
Bill Mann, a Senior Analyst at Motley Fool, dives into why record inflation hasn't deterred investors. He discusses the potential for increased acquisitions and his eye on homebuilders, especially Lennar. Travel spending is on the rise, sparking debates about Royal Caribbean's recovery. Lou Whiteman and Jamie Louko engage in a spirited Bull vs. Bear discussion, weighing optimism from pent-up demand against looming financial concerns. Mann's insights reveal a calm yet analytical take on current market trends.
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Investors Unfazed by Inflation
- Investors remain calm despite record inflation, viewing it as a backward-looking metric.
- Current data suggests that prices on gas, mortgage rates, and other things have been declining.
CPI vs. Core CPI
- While the Consumer Price Index (CPI) includes volatile food and energy prices, the Core CPI excludes them for a clearer picture.
- Although still high at 5.9%, Core CPI offers more stable insights into underlying inflation trends.
Inflation's Impact on Investments
- Inflation erodes purchasing power, impacting investor decisions, leading to a decrease in asset values.
- Strong companies with cash reserves can capitalize on this by acquiring other companies or expanding their market share.