| Consumers have become intimately familiar with the acronym CPI in 2021 as price inflation has crept its way into some of our most basic everyday necessities. And for the first time in a while, a record-breaking level of inflation is a real concern for many Americans and investors alike. The CPI report for June 2021 reported a 5.4% increase over the last 12 months and 0.9% for the month of June alone. That level of inflation, if maintained, would be the highest on record since 1990, 31 years ago. But wasn't this... supposed to happen? Inflation was expected this year as we recover from the pandemic. The markets needed a rebound back to normalcy, but certain sectors grabbed enough boards to put up an inflationary double-double by now. For example, travel-related expenses have skyrocketed, while a semiconductor chip shortage has contributed to a price hike of used cars. Continuing shortages that are slowly being resolved, supply chain bottlenecks, demand outstripping supply, and international incongruencies in economies still constricted due to health-related restrictions all serve to create the numbers we're seeing. Some economists, along with even the report itself, took the time to denote pandemic-impacted sectors separately and remove them from certain calculations. We don't have to panic just because we're on a historic pace at the moment though. However, it is worth noting that there are a few ongoing residual impacts of the pandemic that are lingering or proliferating to contribute to the rates we're seeing, and thus the concerns that this could be worse than transitory. So, how to proceed as a consumer and an investor? - Be objective. Sometimes, gullibility or deceit can disguise itself in the form of beliefs or knowledge, when in reality, no one ever knows for sure what's going to happen. Try to steer clear of any predictions or claims that involve certitudes, and don't go mortgaging your future on the idea that the dollar is going to collapse.
- Consider municipal bonds as part of your investing strategy. Because muni bonds offer higher yields than Treasuries and also are tax advantageous, they may be a good option to preserve your nest egg. Muni bonds don't incur federal tax on interest earned, and by investing in them, you may also be able to bypass state and local taxes, depending on where you live.
- Think alternative investments. If you're concerned about the cost of living and don't want the value of your money to be eroded by inflation, consider some alternative investment strategies that provide additional diversification from stocks and bonds. Real estate, REITs, precious metals, commodities are examples of alternative investments. Like we often say here at Finny: when you own an asset that inflates, you outpace inflation.
📚Need a digestible refresh on what inflation actually means? Take this 6-min lesson on it: | 
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