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Could a Sudden Rise in Inflation Wipe Out Your Investments?

October 25, 2017
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With every week that goes by, the market continues to tick upwards. Yet, for all its growth, the one things all the major analysts are looking for is what will cause it all to end. As more and more financial institutions give their take on the issue, it looks like a trend is emerging.

In an interview with CNBC, Bessemer Trust’s Rebecca Patterson said:

“If inflation ticks up [and] central banks respond, then I think we have a much more volatile picture,”

Adding in a note to the network that:

“Credit markets are crowded and vulnerable to sharply rising rates. So too are pockets of the consumer sector. Higher rates and a resulting stronger dollar could also throw EM [emerging markets] assets into a bad place.”

The idea that the market is not ready for a major rise in inflation (and the consequent rise in volatility) is one that was echoed earlier this month on CNBC by Gina Sanchez of Chantico Global. She says that the “complacent” markets are very vulnerable to a major increase in volatility.

Read: Could Low Market Volatility be Disastrous?

While many of the questions about where inflation rates are going will be answered when the new Fed chair is announced in the new year, the fragility that these experts are warning investors about should be lingering in the backs of their minds. No bull market goes on forever so be sure to consider their analysis of the situation if any of these warning signs do appear.

To read CNBC’s article on Bessemer Trust’s take on the bull market, click here.

To read CNBC’s article on Gina Sanchez’s take on the bull market, click here.

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