Inflation is an intriguing economic phenomenon. For some, it can feel like a crisis, but if we take a step back and truly understand the mechanics, we find that inflation is something we can navigate—and even benefit from.
Many countries, including the U.S., have been experiencing inflation for some time now. To put things into perspective, as of December 2025, the U.S. Consumer Price Index (CPI), which measures inflation, showed a year-over-year increase of 2.9%. This means that the cost of a fixed basket of goods and services rose by that percentage over the course of a year. To add further context, let’s compare it to inflation rates in other economies:
- Mexico:21%
- United Kingdom:5%
- Germany:6%
- Japan:9%
- Canada:8%
- China:1%
The question then arises: Is inflation a crisis? The simple answer—at least for most of us—is no. It’s frustrating, sure. No one enjoys paying more for groceries, gas, and utilities. But a crisis is something that demands immediate intervention, something that fundamentally alters our lives in an instant.
That said, inflation does impact people differently. If you’re on a fixed income, inflation can feel like a crisis, as you must adjust your budget immediately. If you’re a young couple looking to buy your first home, rising property values and increased borrowing costs can create significant financial hurdles.
But for investors? Inflation can present a rare and valuable opportunity.
No, this isn’t about gold hidden away in a safe (though interestingly, firearms might have appreciated more than gold lately). Instead, it’s about recognizing how businesses adjust their expenses and revenue projections in an inflationary environment. Stocks, for example, can be an effective hedge against inflation as companies adapt and pass on costs.
For the first time in over a decade, we can also look at real interest rates with a sense of optimism. Gone are the days of dismal yields—now, we can see meaningful returns on Certificates of Deposit (CDs), government agency bonds, municipal bonds, and even money market funds. And then there’s real estate. In an inflationary environment, adding quality real estate to a portfolio can serve as a source of income, an inflation hedge, and a long-term growth strategy.
Yes, eggs are more expensive. Yes, filling up your tank for a road trip can feel outrageous. But from an investor’s perspective, today’s inflationary environment offers some of the best opportunities we’ve seen in years.