Setting the Stage About Gnaw

Just as the ocean gnaws on the beach, inflation gnaws on your investments and buying power.

Did you ever have a gnawing pain? Perhaps you have experienced a problem that just kept gnawing on your time and your focus? Gnawing is the act of continued biting, consuming, or fretting. It infers that you are losing something. We are in Hawaii, today on the island of Kauai, and everywhere we go we see gnawing. The price of one banana at the Sheraton Resort on Kauai is more than the price of ten pounds of bananas in Wisconsin. The Kauai shoreline is being gnawed continuously by the waves.

In a similar way, you, like just about everyone I have ever met, probably have also had gnawing concerns about retirement, investing, and a host of other aspects of life. The primary solution must always be where you have placed your faith. If you trust in yourself, you will soon be disappointed. If you trust in others, no matter how wise or knowledgeable they are, setbacks will come. I have found there is only one who can protect me and provide for me in a lasting and meaningful way. Read John’s Gospel, especially looking for when Jesus says, “I am!” If you want more focus, consider John chapter 14.

What Probably Won’t Work

Far too many investors think that the price per share is the most important factor in picking a stock. Some chase shares that trade for less than $10 or even less than $1. Others chase shares in bitcoin, cryptocurrencies, Tesla, or Apple because “everyone else is buying this investment.” Some probably think it is better to have 100 shares of a $20 stock than 10 shares of a $200 stock. You might have some success over short periods of time with these strategies.

Fight Inflation with Growing Income

Source: LINK

If you have the time and ability to separate junk from quality, low-priced stocks might be a tremendous opportunity. Stocks are certainly your best choice for a large percentage of your investments. I have found there is an easier way to have success over the long-term. Either buy a low-cost ETF that has a history of increasing dividends, and/or buy stock in companies that have a long and consistent history of increasing dividends. Go to the Fidelity Learning Center link here for a helpful perspective on that strategy. Inflation and Dividend StocksPay particular attention to the graphs. They reveal some interesting historical truths.