How Investors Can Win The Inflation Race

Bad: stubborn prices increases. Surprisingly good these days: Your ability to outrun them.

_{By William Baldwin, Senior Contributor}

Ugly truth about inflation: Once it gets started, it’s hard to stop. But there’s an auspicious element of what’s going on in the financial markets: Investors are much better equipped than they used to be to combat the erosion of their savings.

The 3% gain reported February 12 in consumer prices over the past 12 months came in a bit higher than expected and contrasts with the Federal Reserve’s inflation target. On February 13 the Producer Price Index, a measure of wholesale prices, reinforced the bad news with a 3.5% gain.