Worried About Stagflation? You Might Want to Own These 3 ETFs.
Bonds and international stocks offer surprising potential to protect your money.
Worried About Stagflation? You Might Want to Own These 3 ETFs.
Overview
Americans are feeling bad about the economy. According to May data from the University of Michigan's Surveys of Consumers, consumer sentiment has reached a new record low. People are feeling the pain of higher gas prices from the Iran war and lingering inflation. It's clear that higher prices are bad for people's pocketbooks. But what if the economy got worse?
Some investors might be worried that the U.S. economy is at risk of "stagflation" -- which is a combination of slow economic growth, high unemployment, and high inflation. If the job market stays sluggish and prices stay higher for longer, the American economy might stay stuck in neutral instead of growing strongly.
Details
The last period of serious stagflation in the U.S. occurred in the mid-1970s, when America suffered inflation rates of 12% or higher and a 9% unemployment rate. Something like that could happen again. People who are afraid of losing their jobs and feeling burned out on high prices might cut back on spending. Company profits could shrink. Less consumer demand could lead to fewer jobs being created. That would feel uncomfortably close to stagflation.
Source
Originally published at www.fool.com.
