Welcome to this week’s edition of Advice for the Good Life–your weekly briefing on what matters most: wealth, wellness, and the wisdom to live fully in both.

In today’s Wealth Advisory, we explore practical strategies to help protect your portfolio from the erosive impact of inflation–so that the money you’ve earned retains its real value over time.

Next, in our Wellness Navigator section, Christine Despres introduces the Four P’s–a powerful framework to help you become an active participant in managing your brain health (including the parts you can’t see). This goes far beyond “take a daily walk” and into how you can actually influence the structure and function of your mind.

Finally, in our Etcetera section, we depart from our usual format and hand the microphone to First Trust Portfolio’s Chief Economist, Brian Wesbury, and Deputy Chief Economist, Robert Stein, for their timely perspective on free markets vs. state capitalism–a conversation that is more relevant than ever.

With that…let’s dive in.

Wealth Advisory: Strategies for Protecting Your Portfolio Against Inflation

Natural disasters come in many forms–some strike suddenly like earthquakes, while others unfold gradually like coastal erosion. Both demand preparation and protective strategies. The same principle applies to economic challenges facing families and businesses today. While some financial threats appear overnight, others develop slowly over time. Inflation represents both types of risk, creating immediate price spikes and the steady decline of purchasing power that impacts today’s markets.

Those who experienced the inflationary periods of the 1970s and early 1980s, or witnessed the price increases following the pandemic, will recognize this familiar cycle. While inflation remains more persistent than desired, and concerns persist that tariffs may drive up consumer costs, current price pressures coincide with robust employment levels, strong consumer spending, and solid corporate earnings. This presents a challenging landscape for investors and policymakers seeking to maintain the delicate balance between economic growth and price stability.

Instead of waiting for inflation to escalate into a larger issue, strategic investors should construct portfolios capable of weathering various economic scenarios while maintaining focus on long-term financial objectives. What insights can we gather from recent inflation data regarding the economy and investment strategies?

The gradual erosion of purchasing power through inflation.

The majority of investors, savers, and those in retirement recognize that combating inflation stands as a fundamental reason for investing. Preserving the buying power of a portfolio or savings account, whether through equities, fixed income, certificates of deposit, or alternative investments, remains essential for securing a comfortable future lifestyle. The accompanying chart illustrates this reality clearly. An item costing $1 one hundred years ago now requires $18. The data also reveals that inflationary pressures intensified during the 1970s and have resurged in recent years.

This might suggest that zero inflation–or even deflation where prices decrease over time–would be beneficial. Yet inflation encompasses more than just consumer costs; it reflects the overall economic health. Contemporary economic thinking suggests that modest but positive inflation, typically around 2%, strikes the optimal balance for individuals and the broader economy.

Moderate inflation provides central banks with the flexibility to execute monetary policy effectively, encouraging spending and investment when necessary. Furthermore, some level of inflation helps avoid deflationary cycles, where declining prices cause consumers to postpone purchases in anticipation of even lower future prices.

Therefore, it’s crucial to differentiate between individual and macroeconomic viewpoints. While 2-3% inflation may historically support healthy economic growth, even these moderate levels can damage savers’ interests. Though these rates appear reasonable compared to the double-digit inflation of the 1970s or recent post-pandemic increases, they accumulate significantly over time.

Consider that with merely 3% annual inflation, prices double approximately every 24 years. This means $100,000 in current purchasing power would need $200,000 in two decades–well within a typical retirement timeframe. This erosion particularly challenges retirees and cash holders. For all investors, inflation establishes a “hurdle rate” that investment returns must surpass to build real wealth.

Persistent inflationary pressures continue.

Regarding today’s inflationary climate, many worry about the “earthquake” impact that tariffs might have on price levels. Recent Producer Price Index data reveals that business-charged prices spiked in July. Wholesale costs surged 0.9%, marking the largest monthly gain since June 2022 and exceeding economist projections. Goods prices climbed 0.7% during this period, while services jumped 1.1% in a single month.¹

These figures are significant because wholesale price increases typically appear in consumer costs with a several-month delay as inflation travels through supply chains. This aligns with companies initially absorbing tariff costs but potentially starting to transfer higher prices to customers.

The most recent Consumer Price Index data shows less dramatic price increases but still confirms inflation’s stubborn nature. These latest numbers indicate prices rose 2.7% annually for overall inflation, or 3.1% excluding food and energy prices which remained flat or declined. Housing costs drove much of this increase.²

Beyond abstract economic understanding, these numbers directly affect household budgets. Price increases appear where consumers notice them most: restaurant meals increased 3.9% over the past year, medical care rose 3.5%, and auto insurance jumped 5.3%. Even household goods like furniture have risen 3.4%, adding pressure to family finances already strained by years of elevated prices.

Strategic asset allocation essential for inflation protection.

While these increases are significant, inflation remains well below the double-digit levels seen from 2021 to 2022. Nevertheless, even if tariffs don’t trigger sudden inflation spikes, they may elevate average price levels over time, diminishing cash value. This becomes particularly concerning when wage growth fails to match price increases and investors lack long-term asset allocations capable of exceeding inflation rates.

Understanding inflation’s portfolio implications remains critical. The chart above demonstrates that average cash interest earnings have failed to keep pace with inflation. Additionally, money market fund holdings remain at record highs of $7.1 trillion, despite declining short-term interest rates.³

While past performance doesn’t guarantee future results, historical data shows both equities and fixed income have outperformed inflation over extended periods, as illustrated in the initial chart. However, stocks can experience volatility during inflationary periods, as seen in 2022. This explains why balanced asset class diversification that withstands both inflation and market turbulence helps investors maintain course.

Most critically, investors should avoid making dramatic portfolio adjustments based on monthly inflation reports or tariff concerns. While ensuring portfolios are positioned for various scenarios remains important, overreacting to short-term data frequently results in poor timing decisions that can undermine long-term financial objectives.

The bottom line? Inflation’s steady erosion of purchasing power presents a significant investment challenge. Maintaining a well-balanced portfolio designed to generate both income and growth offers the most effective path to achieving financial objectives.

1. https://www.bls.gov/news.release/ppi.nr0.htm
2. https://www.bls.gov/news.release/cpi.t01.htm
3. https://www.ici.org/research/stats/mmf

Your Wellness Navigator and Holistic Health Guide: Christine Despres, RN, NBC-HWC, CDP

How Do You Know What’s Inside if You Don’t Look?

When it comes to your health, symptoms are just the surface. True healing and prevention begin when we understand what’s happening underneath. That’s why lab work is so much more than just checking boxes at your yearly physical. By the time you are experiencing symptoms you are late to the party.

As a nurse we readily utilize vitals signs as a current snapshot into the patient’s current status but it doesn’t explain why or where the imbalance is. Standard labs are designed to rule out disease and check if you’re in a “normal” range–but “normal” is based on population averages, not necessarily optimal health. Now with modern medicine concepts like P4 medicine, we have the opportunity for comprehensive/functional labs that dive deep into over a 100 biomarkers from all body systems to give you a thorough look inside the inner functions of your body.

• These go beyond disease screening into early detection of imbalances that can lead to chronic illness years before symptoms become severe.
• This is where you can see root causes: nutrient depletion, hidden inflammation, oxidative stress, hormone dysregulation–even if basic labs look “fine.”

P4 Medicine is a modern, proactive approach to healthcare that stands for: P4 = Predictive, Preventive, Personalized, and Participatory

Developed by Dr. Leroy Hood and other leaders in systems biology, this model shifts medicine from reactive (treating illness after it appears) to proactive (preventing illness before it starts).

Here’s what each “P” means:

1. Predictive
   Uses genomics, lab data, and digital biomarkers to predict disease risk before symptoms show up.

• Example: Using genetic testing and metabolic markers to assess risk for Alzheimer’s, heart disease, or diabetes.
• Preventive
  Focuses on lifestyle, nutrition, early intervention, and root-cause medicine to avoid disease entirely.

• Rather than waiting for high blood pressure, we intervene at the stage of insulin resistance, inflammation, or stress.
• Personalized
  No one-size-fits-all plans. Treatments and lifestyle recommendations are tailored to each person’s genetics, labs, environment, and lifestyle.

• Example: A diet and supplement plan based on your gut microbiome, hormone levels, and sleep patterns.
• Participatory
  Empowers individuals to take active responsibility for their health using tools, education, and support. You’re not just a patient–you’re a partner in your care.

• Example: Tracking your glucose or heart rate variability to adjust your habits in real time.

 Why P4 Medicine Matters for Brain Health

• Predicts cognitive decline with early markers like APOE genotype, homocysteine, blood sugar, inflammation.
• Prevents dementia by targeting modifiable risks (like sleep, movement, nutrition, toxins).
• Personalizes prevention strategies based on YOUR biology.
• Involves YOU in the process–from testing to daily choices–so you’re not a passive observer.

P4 Medicine is the future of healthcare–focused on preventing disease, optimizing health, and personalizing care, with you as the active driver.

Dr. Casey Means, the Surgeon General of the U.S., recommends utilizing a direct-to-consumer lab company like Dr Mark Hyman’s Function Health. (‍www.functionhealth.com) She states, “We are living in an exciting time where we have the potential to live the longest, healthiest lives in human history, but this requires optimization. You are the primary person in charge of understanding your body. A movement exists of people demanding to understand their own health data so they can live healthier lives.” (Good Energy, 2024) So go ahead and get started learning your numbers and tracking them over time.

In Summary

Cognitive decline doesn’t just come from the brain–it comes from the whole body. If your metabolic, cardiovascular, hormonal, or nutritional systems are off balance, your brain will suffer too.

Tracking your numbers gives you the power to:

• Spot problems early (before memory loss begins)
• Make targeted lifestyle change
• Reverse risk factors like insulin resistance or inflammation
• Personalize your brain health plan with real data
• You can’t change what you don’t measure. Extensive lab work can be the early warning signals that help you protect your brain and your healthspan before it’s too late. Knowledge is power.

-Your  Wellness Navigator

If interested in working with Christine directly, you can reach her through her email at christine@thewellnessnavigator.com or www.thewellnessnavigator.com.

Departures From Free-Markets Aren’t New

Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 8/18/2025

Recently, due to deals President Trump is making, some are saying the United States has embarked on a version of Chinese-style “state capitalism”–directly entangling markets and government.  No one is claiming that the US is as involved as the Communist Party dictatorship in China or authoritarian Russia, but certainly more entangled than a normal US free market approach would permit.

There are plenty of examples to go around, like the Trump Administration putting pressure on Intel to replace its CEO, wanting Goldman Sachs to fire an economist, demanding 15% of revenue from AI chip sales to China, creating a government-owned Golden Share in Nippon Steel’s purchase of US Steel, and pursuing pledges of hundreds of billions of investment from our trading partners to buy-down tariff rates.

On top of all this, the US is developing a system of tariffs that relies on the discretion of the president (and his team), varying from country to country, and in many cases product to product.

On the surface, the argument that the US is moving toward “state-run capitalism” seems to have a lot of evidence in its favor.  What the argument ignores is that this started long ago.

Starting back in the 1930s, the government paid farmers either not to farm, or farm certain crops.  In the 1970s, the US instituted price controls and differentiated between industries and even individual companies within industries.  The US also capped oil prices, restricted branching by Savings and Loans and would not let banks pay interest on checking accounts.

For decades, by backing Government Sponsored Enterprises (GSEs), like Fannie Mae and Freddie Mac, government held mortgage rates artificially low which distorted the housing market.  This bid up the price people were/are willing to pay for the existing stock of homes, while many state and local governments make it difficult to build new housing.  The same thing goes for the takeover of student loans by the federal government and the push to forgive those loans.  Anyone who thinks state capitalism is new doesn’t know history.

There are plenty of other long-standing interferences in the market in addition to these, like ethanol subsidies and gas mileage requirements (which, contrary to the narrative about Trump were recently watered down by the Big Beautiful Bill).  The Biden Administration allocated green energy subsidies to favored firms under the Inflation Reduction Act, the CHIPS Act favored semiconductor production in the US, and the Nippon-US Steel takeover was originally blocked for political reasons.  Environmentalists forced manufacturers to change lightbulbs, stoves, dishwashers, toilets, washing machines, and dryers.

So, forgive us if we yawn at the current gnashing of teeth over this issue in 2025.  Are we supportive of it?  No.  But is it new?  Absolutely not.  We’ll breathe our last breathes standing up for free markets against political meddling.  We are dismayed that Republicans, who are historically associated with supporting free markets, are willing to support this, instead.  No wonder younger Americans who don’t know economic history well are often supportive of communism and socialism.

And while we fully understand this interference in markets began long ago, it accelerated in a huge way during the Financial Panic of 2008-09, when President George W. Bush bizarrely announced that he had to violate free market principles in order to save free markets.

Back in 2008, mark-to-market accounting procedures turned a manageable loss of housing value into a once-in-a-century financial panic.  But instead of adjusting those accounting practices, policymakers set up TARP to bailout Big Banks, designed an auto bankruptcy that bailed out Big Labor, and launched multiple rounds of Quantitative Easing.

No wonder many people who might otherwise vote to support free markets became more receptive to the idea that the economic system was “rigged” in favor of certain groups.  And, in turn, if politicians are going to rig the economic system in favor of those groups, why not their preferred special interests, as well?

The bottom line is that it would take a major change in political attitudes to undo the massive harm inflicted by the policy reaction to the 2008-09 crisis.  We are hopeful this change in attitude arrives eventually, but don’t expect it anytime soon.  The current leadership expects a surge in potential long-term economic growth from its policies, but the more the government entangles itself in the market, the less likely that is to happen.

That’s all for today.

Until next week,

All my best,