Invest Your Money

Investing is a personal process — every investor is different. But the underlying goal is the same: outpace inflation and preserve your purchasing power. The challenge is that inflation is hard to gauge, since official measures can be manipulated or misleading.

Market pricing is often the more honest gauge. Compare CPI headlines to what's actually happening in your own life — are your day-to-day expenses rising faster than a benchmark like wages or the minimum wage? Currency exists to simplify the exchange of goods and services, but because it's issued by a government or central institution, that institution can print more of it — devaluing what you already hold.

Consider a book of stamps bought in 1930: trade it for a loaf of bread today, and you'd get a drastically different value. Our grandparents could buy a loaf of bread, a gallon of milk, and a pack of cigarettes for a nickel; today, those same items cost around $20.

That's inflation eating away at your money — which is why investors turn to inflation-hedged assets to keep pace with that deterioration.

The cycle can also run in reverse, with prices falling and purchasing power improving. Managing that shift is the Fed's job — raising rates, which has slowed things down in 2026, including real estate. As money moves, it flows toward whichever investment offers the most favorable return.

Why Do Interest Rates Affect Prices?

The amount of money in the system, and how it's allocated, matters at any scale — whether you have a billion dollars or a hundred.

We look at how asset classes fluctuate and move in correlation — or non-correlation — with one another. That relationship is part of what drives more stable growth in the face of currency debasement, and it's the foundation of the efficient frontier model, discussed at length in David Swensen's book on portfolio management, Unconventional Success.

Great investors take a variety of approaches. Many start at the macro, global level and work down to the local; others, like Buffett or Lynch, focus more on the micro level. Real estate investors tend to focus on specific locations and cities. We look at the data appropriate to each investment vehicle, since every asset class carries its own built-in diversification.

How Individual Companies Respond to Inflation

Many U.S. domestic companies operate across the globe, hold large fixed-income and marketable securities on their books, and use currency hedges. A company like Chipotle, by contrast, is hyper-focused on its own business — it holds little investment beyond its operations, so its valuation is most sensitive to food and labor costs.

A company like Exxon, on the other hand, is sensitive to oil prices along with the usual factors. We watch how inflation affects earnings through commodities like these — when prices rise on a stronger dollar, asset prices tend to follow.

The bottom line: investing isn't a gamble, it's a necessity. We live in an interest-rate-driven world where you need to invest just to keep pace with inflation.

Building a Portfolio That Fits You

The best inflation-hedged investments depend on your risk tolerance, which is why the endowment model portfolio is often favorable.

Start by defining your short-term, mid-term, and long-term liquidity needs.

Be careful about following the herd or randomly picking ETFs — that's not a strategy. That idea echoes lessons from investors like Buffett and Lynch: risk comes from not knowing what you're doing, and risk management comes from knowing what you own. If you're over-diversified, break up your asset class allocations and commit to a rebalancing discipline.

Four of the best investing books for portfolio management and security selection:

• Unconventional Success
• The Intelligent Investor
• Winning the Loser's Game
• Security Analysis

You can also choose asset classes based on your own personality and skill set — as Walker Deibel puts it: attitude, aptitude, and action. If you're handy, for example, buying a rental property might be your best bet.

If you're not handy at all, passive real estate might work better. Peter Lynch, in his excellent book One Up on Wall Street, recommends finding your edge — the area where your own knowledge or experience gives you an advantage over other investors.

Managing Your Own Behavior

The goal is to battle the investor's worst enemy: themselves. For example, we advise some clients who have spending compulsions to buy gold and silver bullion — it satisfies their retail-shopping itch while locking up their capital in a commodity.

Like real estate, it's illiquid, so once you're in, plan on a 20–30 year time frame. If you need quick liquidity, public markets can provide that, but be cautious about how much exposure — and how compulsive behavior — can play into that decision.

It isn't just about returns, economic cycles, and market fluctuations. It's about managing your own behavior as an investor. The best book on this subject is Benjamin Graham's, and his lessons apply across every asset class.

Additional Resources

We also keep a running spreadsheet of allocations by asset class and sector, along with a total tracker, pinned to our Facebook page.

Mozella Asset Management Facebook Page

For testing drawdowns and volatility, Portfolio Visualizer is a great resource.

Every asset class, book, and rule of thumb here is only a starting point — the right mix depends on your goals, timeline, and tolerance for risk. If you'd like help applying any of this to your own portfolio, request an appointment with our team.