The market’s recent correction has been blamed on three factors. Investors can’t do much about two of them. First, high valuations after a long and strong bull market mean returns will probably be lower from here. The odds of a happy outcome are simply reduced by the higher starting point.
Second, the rise of the robots is beyond our control. If automated program trading means markets over-react more, we will just have to live with those gyrations.
The third cause, however, can be managed. Any meaningful return of inflation will have predictable and time-tested influences on our investments. The time to prepare for a more inflationary environment is now — before rising prices become entrenched.