Ameriprise Financial Tips

Should You Alter Your Investment Approach?

By Edward Pontarelli Jr.

If you drive a car, chances are you’re feeling the “pain at the pump,” caused by in ationary pressures and global supply chain disruptions, along with the war in Ukraine, all of which have contributed to the price of gasoline to surge in recent months. But the sticker shock goes beyond gas stations. In 2021, the in ation rate, as measured by the Consumer Price Index, rose by 7.0 percent, the largest annual change in living costs since the early 1980s.

What does this mean for consumers? In basic terms, the cost of an average basket of goods rose seven percent in just one year – and it remains to be seen how long it will take for in ation to cool down. While much attention is paid to how this is impacting short-term purchases like food and clothing, it’s also important to consider the toll it could take on your investments. Consider that over the ten-year period ending in 2020, the median annual in ation rate was 1.7 percent. At that level, it would take more than 40 years for living costs to double. If, as was the case in 2021, the annual in ation rate averaged 7 percent per year, the cost-of-living would double in just over ten years. If you’re wondering if your portfolio is built to withstand these challenges, here is some information to help you decide:

Investment considerations during inflationary times

First, remember that the change in the in ationary environment does not necessarily mean it’s prudent to dramatically alter your investments. If your portfolio is appropriately balanced with your risk tolerance and time horizon in mind, ne tuning your investments may be a more appropriate strategy.

Equities

In general, equities (also known as stocks) play an important role in long-term portfolios. Compared to other asset classes, stocks may experience more volatility in the short term. However, they historically generate superior returns over the long term and should be positioned to do so in your portfolio, particularly if you have a long time horizon. Making regular investments in equities through retirement plan contributions can be an e ective way to build your equity holdings in a volatile market environment. Systematic investing can enable you to buy more shares of an investment at a lower expense when markets are down and pay for fewer shares when prices are up.

Fixed income investments

Bond yields don’t always keep pace with in ation, particularly with living costs as high as they are today. If you’re concerned about this, investing in Treasury In ation Protected Securities (TIPS) is one option to consider. ese are marketable securities that pay a set rate of interest, but the underlying value of the bond is adjusted based on the in ation rate.

Also worth considering as a xed income investment tied to in ation are I-Bonds, a form of U.S. Savings Bonds. You can invest up to $10,000 per year in these bonds. e interest rate paid is adjusted every six months based on the in ation rate. In early 2022, I-Bonds are paying a yield of 7.12%. However, these bonds are not completely liquid, so your money needs to be committed for at least a year, with full liquidity reached in ve years.

Other investment options

ere are other investments that o er diversi cation potential in a high in ation period. is includes real estate, which may see rising values and higher income streams that o en tend to re ect changes in the cost-of-living. Real Estate Investment Trusts are marketable securities that o er ready access to the real estate market. Precious metals such as gold can play a role as a hedge against in ation. However, gold is a highly volatile asset class and shouldn’t represent more than a small percentage of your portfolio.

A good time to plan

It can be bene cial to sit down with your nancial advisor to more carefully assess how your portfolio and overall nancial plan are situated in today’s economy. Your advisor can help you assess how to manage your current expenses more e ciently, while still keeping your most important savings goals on track.

Edward Pontarelli Jr, APMA®, CRPC® is a Financial Advisor and Managing Director with BeaconPoint Wealth Advisors a financial advisory practice of Ameriprise Financial Services, Inc. in Providence, RI. He specializes in fee based financial planning and asset management strategies and has been in practice for 20 years. Please contact him at https://www. ameripriseadvisors.com/team/beacon-point-wealth-advisors or (401)824-2532, 1 Citizens Plaza Ste 610 Providence, RI 02903.

Investment advisory products and services are made available through Ameriprise Financial Services, LLC, a registered investment adviser.

Ameriprise Financial Services, LLC. Member FINRA and SIPC.

Maximizing the Impact of Your Donation to Ukraine and Other Humanitarian Relief Efforts

By: Carrie McPherson

As the humanitarian crisis in Ukraine has reminded us, when disaster strikes, people spring into action to help. Images of volunteers providing medical aid, shelter, and meals to injured and displaced civilians are a heartwarming antidote to the otherwise horrifying backdrop of war. For those of us who are not able to help the people of Ukraine in person, but still want to aid in relief e orts, it can be hard to know how best to get involved and ensure the fullest impact of your support. Here are some tips to guide your approach:

Make a monetary donation. In almost all cases, it’s best to give money instead of goods, which have the potential to spoil, go unused, or create logistical headaches for the very relief organizations you wish to help. Cash is the most e ective and e cient option. Whether it’s an online donation, gi by text, or rounding up a purchase at checkout, contributing money may seem impersonal, but it empowers the agencies that are doing the work. Cash gi s are quick and exible, allowing organizations to purchase what is needed, o en in bulk, at reduced rates, near disaster sites. When supplies are purchased on location, it helps ensure the food is fresh and items are familiar to locals. Buying nearby also supports local businesses as they work to recover from the event.

Seek out trustworthy organizations. Unfortunately, scam

artists o en see opportunity in the misfortune of others. It’s not unusual for counterfeit charities to pop up during a disaster, seeking to capitalize on the public’s goodwill. e invasion of Ukraine is no di erent. News outlets have reported on the proliferation of fake nonpro ts that purport to be raising money for relief e orts, but in reality, are nothing more than fronts for swindlers. Don’t let the dishonesty of a few discourage your inclination to give, but make sure the charity you donate to is reputable. Look for organizations that have a proven track record and clear mission statement. Review their ratings and nancial statements on websites like CharityNavigator.org or GuideStar.org. Many major employers in the U.S. give employees the option to have a portion of their regular paychecks donated to causes they care about. And some even o er dollar-for-dollar matches on donations up to a certain dollar amount, which enable employees to double the impact of their gi s. Whatever options are available to you, and however much you’re able to give, it’s wise to determine whether you want to give all at once or spread out the impact of your generosity over time.

Save on your taxes to give more next time. Donations

to a quali ed charity may qualify for a tax deduction if you itemize deductions. Keep in mind that there are limits to nancial contributions and rules for non-cash donations like property. Talk to your nancial advisor and tax professional before making a donation, to map out potential tax implications and requirements.

Watching major con icts and crises like the one in Ukraine unfold can leave us feeling deeply sad and powerless, but there are ways to help. Consider the above tips to make the greatest impact with your generosity.

Carrie A. McPherson, CRPS®, CDFA®, ChSNC® is a Financial Advisor and Certified Divorce Financial Analyst with BeaconPoint Wealth Advisors, a financial advisory practice of Ameriprise Financial Services, Inc. in Providence, RI. She specializes in fee based financial planning and asset management strategies and has been in practice for 13 years. Please contact her at www.ameripriseadvisors.com/team/ beacon-point-wealth-advisors or (401) 824-2557, 1 Citizens Plaza Ste 610 Providence, RI 02903

Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.

Investment advisory products and services are made available through Ameriprise Financial Services, LLC, a registered investment adviser.

Ameriprise Financial Services, LLC. Member FINRA and SIPC.

Mind your budget and be strategic. Even the most generous

among us have a budget when it comes to giving. As you determine how much you plan to donate to Ukraine or other relief e orts, consider whether you intend your gi to be a one-time event or an ongoing nancial commitment. While a bigger, lump sum donation can go far in helping, particularly at the beginning of a crisis when the need is great, there may also be bene ts to spreading out gi s if you intend to be a long-term supporter.