Inflation and the moves you control

Inflation is frustrating. You feel it at the grocery store and gas pump and see your portfolio's returns suffer, but it also feels like you can't do anything about it.

And, unfortunately, inflation is running hotter than expected. Prices rose more than 4% over the past year, with the war in Iran playing a major role. The Federal Reserve is concerned, as it has two main priorities: keeping inflation and unemployment low.

When inflation is low, the Fed is comfortable lowering interest rates. That means lower mortgage rates but also lower interest in your savings account. To combat rising inflation, it often has to increase them and there's a good chance they'll do that later this year.

The good news: you're not powerless. You can take action to reduce inflation's impact with good decisions and planning. Here's how:

A few ways to act now

Put idle cash to work. Cash in an account paying under 1% can move somewhere that at least keeps pace with prices. An easy win, fully in your control.

Adjust your advisor and fund fees. Let's say your portfolio returns 7% each year. After inflation, it's more like 3-3.5%. Then subtract out a financial's advisor's fee (typically 1% of assets each year) and ETF and mutual fund fees, and your left with around 2%. Can you eliminate the advisor fee and reduce ETF and mutual fund fees?

Understand and adjust investments in growth stocks, such as tech. Growth stocks tend to get hit hard if inflation persists. Determine if you are comfortable with the risk.

Understand and adjust your bond exposure. Some bonds fall harder than others when rates stay high. Knowing which are yours turns a future surprise into a decision you’ve already made.

Recheck your mortgage math. If you have a mortgage, your chances of refinancing to a lower rate may have slipped. If you were planning a home purchase, reevaluate your borrowing costs and what you can afford.

How can Mezzi help?

Mezzi can help with analyzing and planning every one of these in less than five minutes. For instance, my portfolio is down over $80,000 in the past month. Mezzi explained that over 50% of this decline can be explained by inflation-sensitive sectors.