Thread: Economics Investments & Personal Finance
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Old 01-25-2013, 09:48 AM   #6
La literatura

Casino cash: $
Originally Posted by Amnorix View Post
Sure, fun, but you're forgetting (as everyone does), that money was tighter then, and inflation higher, and loan rates much higher. The average person could make 5+% on a bank account, and 8+% on a CD, but had to pay 10+% on their mortgage and 12% on their car loan while inflation is going up 5% per year. Your investment returns are subject to the LAW of inflation. If you make 1% on your ultra-conservative CD and inflation goes up 2%, you have LOST purchasing power.

Everything is relative to everything else. A 5% return in a 3% CPI inflationary year is BETTER than an 8% return in a 10% year (God help us).
Great point. How has the inflation rate been recently? How quickly does it fluctuate? How predictable is it (and does predictability help an average investor)?
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