Videos

13. What is Inflation

Download Preston’s 1 page checklist for finding great stock picks: http://buffettsbooks.com/checklist

Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location:

In this lesson, students learned about the impacts of inflation. By understanding what causes inflation, we can then understand how it destroys the yield of a loan and maintains the value of corporate ownership.

We learned that inflation is generally caused when the government increases the supply of money in the financial system. When this occurs, members of the system have more money to spend and the price of goods and services go up.

This increase in price can drastically destroy a long term investment if the investor doesn’t account for the compounding inflation rate.

The most important thing you can learn from this lesson are the two following points:

1. Bonds are completely affected by inflation.
2. Stocks are not necessarily affected by inflation.

Articles You May Like

The Top 3 Robotics Stocks to Buy in April 2024
3 Flying Car Stocks to Buy on the Dip: April 2024
Millionaire Bets: 3 Stocks the Smart Money Is Buying Now
Top Wall Street analysts pick these 3 dividend stocks for higher returns
Don’t Miss the Boat! 7 Stocks That Can Change Your Life by 2030