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Inflation, Slumpflation, Stagflation, and Now Skimpflation - What's an Investor to Do?

Skimpflation is just the latest worry for consumers and investors. Here's what experts say to do about it.
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Shrinkflation, slumpflation, stagflation, and now — there’s skimpflation. 

So, what exactly is skimpflation? That's when prices rise and goods and services suffer in quality. Signs of skimpflation are all around us.  Maybe, you're seeing longer waits for food delivery, seeing fewer condiment options available at the convenience store, and bare-bones customer service at the airport or the hotel reception desk.

The COVID-19 pandemic is inching closer to the two-year mark and consumers are noticing that service just hasn’t been the same at the local restaurant, the airport, or at hotels. Businesses across the country are facing inflationary pressures that are showing up in the details. Travelers are noticing that hotels are no longer providing daily housekeeping services and that the breakfast buffets have turned into grab-and-go cereal and coffee. Companies are choosing to skimp on goods and services instead of raising prices creating a different type of inflation.

TheStreet discussed all things inflation, stagflation, and skimpflation.  Plus, our team of experts discussed how to inflation-proof your portfolio during these challenging times.  Watch the FREE webinar: How to Play the Inflation Trade, brought to you by VanEck.

Experts include:

TheStreet's Susan McGinnis hosts the 45-minute conversation, see the excerpt above or watch the full webinar below.

Video Highlights | How to Play the Inflation Trade

Editor's Note: This webinar was recorded on October 28, 2021

David Schassler, Portfolio Manager of the Inflation Allocation ETF, RAAX, at VanEck, is concerned about the stagflationary scenario. 

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00:38:15 “Corporate earnings are under pressure...with margins being pressured by wage inflation. Employees are now taking the reins and demanding higher wages.” Schassler says he is looking towards companies that benefit from higher inflation.

About David Schassler, Portfolio Manager of the Inflation Allocation ETF, RAAX, at VanEck

About David Schassler, Portfolio Manager of the Inflation Allocation ETF, RAAX, at VanEck

Related: 8 Assets to Inflation-Proof Your Portfolio

Some businesses are adding pandemic-related surcharges to their bills and you might just miss it if you’re not looking. The surcharges may show up in the form of a COVID-19 Fee, Coronavirus Fee, PPE Fee, Sanitation Fee, or Cleaning Fee. Compounded with the national labor shortage and supply chain disruptions, skimpflation is one measure that isn’t being captured in government data despite its seemingly transitory nature. As the quality of service declines will there be a breaking point for consumers and will businesses face a reckoning?

Stagflation in the 1970s saw stocks and bonds decline in tandem. While the current fiscal and monetary policy environment is different, the current investment landscape is not one for investors to be complacent without reassessing and diversifying assets

Nancy Davis, Founder and Chief Investment Officer, Quadratic Capital Management, is concerned about the potential for a stagflationary environment and its effects on a traditional 60-40 portfolio.

About Nancy Davis, Founder, and CIO, Quadratic Capital Management

About Nancy Davis, Founder, and CIO, Quadratic Capital Management

Related: Inflation Is Here. How Prepared Is Your Portfolio? FREE Webinar

00:35:15 Bob Lang, co-portfolio manager of TheStreet's Action Alerts PLUS and Trifecta Stocks, notes that “wage inflation is...the big bugaboo in a room that hasn't really been talked much about.” And wage pressures will weigh on earnings with the big question: can companies raise prices just enough to offset wage hikes or will shareholders bear the brunt with lower earnings. 

About Bob Lang, AAP Portfolio Co-Manager

About Bob Lang, AAP Portfolio Co-Manager

Related: Here's Why Gold and Crypto Should Be In Your Portfolio Now