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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Inflation Fears Creep Higher

Affluent investors express growing concerns about inflation, according to the latest Millionaire Corner research. What's driving these fears?

| BY Adriana Reyneri

Inflation fears are rising among affluent investors, a growing unease linked with  increased worry about the U.S. economy, political environment and national debt, according to a new study from Millionaire Corner.

More than 70 percent of Main Street investors – those with investable assets of $100,000 up to $1 million – rank inflation as a top national concern,  along with the economy, federal deficit and  political scene, according to a first quarter study on the attitudes and behaviors of affluent Americans. Two years ago, two-thirds of the Mass Affluent listed inflation as a concern.

The share of Millionaires worried about inflation has jumped to 64 percent in 2012 up from 55 percent a year ago. (Millionaires have investable assets of $1 million to $5 million.) Millionaires also express growing concern over the prolonged economic downturn, political environment and national debt.

Are growing inflation fears justified? Not so much, says Chairman Ben Bernanke, who heads the Federal Reserve, the nation’s central bank charged with a dual mandate of  regulating inflation and  maximizing employment. Bernanke maintains that inflation will remain tame for the foreseeable future as the economy continues to recover at a moderate pace.

Inflation as measured by the Consumer Price Index – the market value of a basket of goods – has risen at the rate of 2.9 percent over the last 12 months, according to the most recent data from the U.S. Bureau of Labor Statistics. Energy costs, a subset of the index, are rising at the faster annual rate of 6.1 percent and food costs are gaining at the rate of 4.4 percent a year. Minus food and energy, the prices are rising at an annual rate of 2.3 percent, the largest 12-month increase since September 2008, reported the bureau.

History shows that rising gas prices can have a profound affect on consumer confidence and spending habits, but some investor’s fears go beyond a short-term spike in fuel costs. Critics of the Federal Reserve monetary policy predict that ongoing efforts to stimulate the economy will have an inflationary affect.

Inflation reduces the purchasing power of a dollar and, as a result, devalues investment income. Inflation is now outpacing interest  rates currently offered on savings accounts,  bank certificates of deposits, Treasuries and other fixed-income products. Severe inflation can  erode corporate profits and  increase volatility on stock and bond exchanges.

Fears of inflation are highest among retirees, according to a monthly survey of 1,150 investors conducted by Millionaire Corner in February. Retirees rank inflation as their top financial concern, followed by having adequate retirement savings and the cost of health care. Non-retired investors worry more about job security, reducing personal debt than inflation.