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Founder,
Chief Executive Officer,
Senior PIM Portfolio Manager,
Insights from Tom Moran Moran Wealth Management

n our recent conversations with clients, there was one topic Chairman Powell likely referred to this process when he talked
that seemed to be at the forefront of everyone’s mind — about elevated inflation readings being “transitory.” The elephant in
Iinflation. While there are overt signs that inflation is here, the the room is whether the Fed’s actions on monetary policy have the
question remains if it will stay. At first, the Federal Reserve and potential to create lasting inflation that can negatively impact the
Jerome Powell insisted that inflation is merely transitory due to markets and the broader economy for years to come.
the unwinding of the pandemic. They recently, however, started to Please talk to your Financial Advisor or give us a call to discuss
change their tune suggesting that inflation may be more persistent. your situation and pursuit of strategies designed to protect your
In order to evaluate how long inflation is here to stay, we need to portfolio from inflation. One option is to invest in equities with
take a step back and look at why we are experiencing inflation in strong dividend history and a healthy balance sheet. Historically,
the first place. dividends have risen faster than the rate of inflation, acting as a
Broadly stated, inflation is a sustained rise in prices caused by much-needed hedge against inflationary pressure. Many dividend-
more dollars chasing the same amount of goods and services. In oriented companies are also value stocks, so we anticipate value
the depth of the crisis, the Fed provided liquidity to the financial stocks continuing to outperform growth stocks in the short
system and the U.S. government passed truly enormous amounts and medium-term. When inflation increases above 4%, equities
of fiscal stimulus to both companies and the American consumer. traditionally start becoming less favorable for investors than other
Those actions may have prevented a greater economic crisis asset classes. 1 If this is the case, we recommend clients discuss
and enabled a rapid recovery. Demand is back—and expected other investment options depending on their situation and what
to grow—but you can’t restart an entire economy overnight. is most appropriate for them. At Moran Wealth, we offer multiple
The disrupted supply chains and labor shortages are still sorting proprietary Private Investment Management (PIM ®) portfolios
themselves out, causing wild price movements for goods and that may be appropriate for clients wanting to protect their
commodities such as used cars, coffee and lumber; shortages for assets against inflation. In order to evaluate your portfolio for its
everything from semiconductors to caramel syrup. Even Dollar sensitivity to inflation, please reach out to set up an appointment
Tree is raising their prices on some items above $1. However, with one of our financial advisors.
we believe this chaos in supply chains should eventually calm, *1https://www.barrons.com/articles/inflation-is-good-news-
restoring a measure of normality to the prices of many goods. for-stocks-with-high-dividends-51621170002

Thomas.Moran@MoranWM.com
Tom Moran Phone: 239.393.8076 www.MoranWM.com
Founder, Chief Executive Officer, Senior PIM Portfolio Manager Fax: 239.431.5239 5801 Pelican Bay Blvd, Suite 110,
Naples, FL 34108

This article contains general information that is not suitable for everyone and was prepared for informational purposes only. Nothing contained herein should be construed as a solicitation to buy or
sell any security or as investment advice to any reader. The article is an advertisement for Moran Wealth Management in its capacity as a registered investment adviser. The article contains certain
forward-looking statements that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially. As such, there is no guarantee
that any views and opinions expressed herein will come to pass. Past performance is not a guarantee or predictor of future performance.

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