Everyone talks a lot about inflation. Heck, I haven’t stopped talking about it for months.
Why?
Simply put, inflation is a real economic force that affects everybody, whether they realize it or not.
A lot of times, when we talk about things that affect the economy and the markets on a broad scale, we aren’t talking about things that matter to your day-to-day life.
The P/E ratio of some random company isn’t going to change the price you pay at the pump or how much it costs to cook burgers for dinner.
But inflation affects every dollar you spend in a significant way, especially when it’s as out of control as it is right now.
And the reality is, it is out of control. This article cites estimates that the average American household has had to spend $3,500 more this year compared to last year.
And it goes further: “between November 2020 and November 2021, the bottom 20 percent spent $309 more on food, $761 more on energy, $476 more on shelter, $390 on other commodities, and $224 on other services.”
And the folks with higher income spent even more (but they had more to begin with).
Those numbers are affecting folks at every level of society, from every background, whether they’re traders or not.
How can most people cope when there’s an additional $3,500 in expenses coming out of their bank account?
Most employers aren’t forking over those kinds of raises. Even companies that do cost of living increases do them slowly, and they’re usually a standard one or two percent, which wouldn’t come close to matching a sudden $3,500 spike.
And that’s why I think what we do here is so important.
Because, even though trading is always risky, you can always lose money, and you should never trade with money that you need to pay for food, heating, electricity, or anything else vital…
It also really can help you supplement your income when everything else is failing.
As the world gets more expensive, I expect more and more people will turn to trading as a resource to help them combat it.
The challenge is if they don’t know what they’re doing, it can create even more headaches.
So a few words of advice if you are new:
Take your time. Don’t rush into decisions just because you feel like you have to take action.
Keep your trade sizes small and your stop losses tight.
And seek advice from anyone who will give it. Well, maybe not anyone, but anyone you believe knows what they’re talking about!
Trading is challenging, and there will always be a learning curve. But if you stick with it, I believe you can reach your trading goals.
Jeffry Turnmire and InvestPub do not provide investment advice. Trading involves a substantial risk of loss and is not suitable for all investors. Many traders fail and you should not trade with money you cannot afford to lose. If you need personal financial advice, consult a financial advisor.
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