That's when prices rise and goods and services suffer in quality. There are signs of skimpflation all around us. Maybe you're seeing longer waits for food delivery, fewer condiment options at the convenience store, and bare-bones customer service at the airport or hotel reception desk.
The COVID 19 pandemic is getting closer to the two-year mark, and consumers are noticering that service just hasn't been the same at the local restaurant, the airport or hotels. There are inflationary pressures that are showing up in the details, and businesses across the country are facing. Travelers are noticering that hotels are no longer providing daily housekeeping services and that breakfast buffets have turned into grab-and- go cereal and coffee. Companies are choosing to skip on goods and services instead of raising prices, creating a different type of inflation.
Our team of experts discussed how to inflation-proof your portfolio during these challenging times. The 45 minute conversation is led by Susan McGinnis, see the excerpt above or watch the full webinar below.
How do I play the Inflation Trade?
David Schassler, Portfolio Manager of the Inflation AllocationETF, RAAX, at VanEck, is concerned about the stagflationary scenario.
00: 38: 15 Corporate earnings are under pressure. With wage inflation pressured the margins. The employees are demanding higher wages and taking the reins. Schassler says he is looking for companies that benefit from higher inflation.
Some businesses are adding surcharges to their bills that could cause you to miss it if you are not looking. The surcharges can come in the form of a COVID 19 fee, Coronavirus fee, PPE fee, Sanitation Fee, or Cleaning Fee. Skimpflation is a measure that isn't being captured in government data despite its seemingly transitory nature, due to the national labor shortage and supply chain disruptions. Will there be a breaking point for consumers and businesses as the quality of service declines?
In the 1970s, stocks and bonds declined in tandem. While the current fiscal and monetary policy environment is different, the current investment landscape is not one for investors to be complacent without reassessing and diversifying assets.
Nancy Davis, Founder and Chief Investment Officer, Quadratic Capital Management, is concerned about the potential for a stagflationary environment and its effects on a traditional 60 -- 40 portfolio.
The big bugaboo is in a room that hasn't been talked about, and hasn't really been talked about. Earnings will be weighed by wage pressures, and companies will have to raise prices just enough to offset wage hikes or will shareholders bear the brunt of lower earnings.