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January 26, 2011

Inflation?

The January 26th article in the Wall Street Journal, (Read “Why you Can’t Trust the Inflation Numbers“), raises more questions than it answers.  That is the point of the article.  Today you can find someone advancing one view and at least one person advancing a different view on the same topic.  How do you know which one is right?  How do you know if there are other views you are not aware of?  Combine that with the accuracy of forecasts and you realize how difficult it is to determine what actions to take.  Some would argue that the answer is diversification.  That is not all there is.  You have to know where you are heading (what are your goals?), you have to know when you want to achieve your goals (what is your time horizon?), how important it is to you that you achieve your goals (risk tolerance) and more.  Yes, I am advocating planning, monitoring your progress and reviewing periodically. 
There is much more that could be said, but I have committed to keeping these shorts.  I will try to cover more in the future.

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