Hyperinflation?

Q AWhat’s hyperinflation? Are we experiencing it now in America? — B.H., Honolulu Not at all. It’s true that the U.S. year-to-year inflation rate in March reached 8.5%, the highest rate in 40 years and well above the average annual rate of around 3.1% — but that’s nowhere near hyperinflation.

Hyperinflation is extreme, rather rare and typically short-lived when it happens. Definitions vary, but it’s often defined as a monthly inflation rate of at least 50%; it’s also been used to describe a threeyear cumulative inflation rate of 100% or more. In an environment of hyperinflation, prices for common goods can double within days — or even hours.

The folks at Ernst & Young Global recently opined that the following countries were experiencing hyperinflationary economies: Argentina, Iran, Lebanon, South Sudan, Sudan, Suriname, Turkey, Venezuela, Yemen and

Zimbabwe.

Q When investing in stocks, how big a gain should I shoot for before selling? — T.W., Columbia, Missouri

A It’s best not to aim for any particular gain, but to invest in financially strong companies that seem to have the most promising long-term growth prospects. Once you do, plan to hang on for at least five years, if not a decade or two — while keeping up with those companies’ progress and developments, to keep an eye out for any red flags and make sure they remain promising.

Yes, you might sell after netting a 50% or 100% gain, but that can mean you miss out on much bigger gains. Imagine selling shares of Apple or Microsoft years ago after doubling your money: Many investors regret doing just that. Great wealth built via the stock market often happens over many years.

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