Redrick Terry:
It is 4 Your Money time. We are joined once again by David Nelson, CEO of NelsonCorp Wealth Management. David, welcome back.

David Nelson:
Thank you Redrick I appreciate it.

Redrick Terry:
So lately it seems like we can’t go much more than a month without discussing the topic of inflation. We’ve heard about it a lot. What are the latest developments on that front?

David Nelson:
So we’ve spent a lot of time discussing inflation and the potential difficulties that this could present itself as far as for individuals. Again, you make a decent rate of return as far as on your money, but inflation is quite high that can basically take away all your gains or a good percentage of your gains. Today what I want to do is just to kind of reinforce what you brought up and that is it, this is a hot topic and people do need to pay attention to it. So a couple examples might be as far as, of the topics being discussed, sent around in our area, commodities and commodity prices have gotten to nice high levels as far as corn prices, bean prices, et cetera. Lumber certainly been a big item, but we’re at decade high levels as far as today, compared to what we’ve had the last several decades. Again, we’ll see if this trend continues Redrick, we don’t know for sure, but certainly it’s worth people paying attention to as far as the potential ravages that could come from inflation.

Redrick Terry:
Right, no doubt about that. So what have some of these key areas of price increases looked like since coming off of those economic lows in the spring of last year?

David Nelson:
Yeah. So the graph that I brought today, again, a nice visual as far as to kind of bring people in the loop as far as what’s taken place, and what we see here is that the blue line is illustrating lumber. And what we see is lumber up 400%. I have to factor this in because again, too often people play with numbers to their advantage to try to illustrate a point. So I want to make sure this is clear. We’re coming off of the lows, the crises, as far as the virus that we’ve been fighting and prices plummeted. So if we go a year back, those were some of the lowest lows that we’ve seen in a long, long time.

David Nelson:
And so prices are up dramatically since then and again, we’re talking about 400% as far as for lumber, we’re talking about as far as high levels, as far as for steel that’s in the red, and then corn prices. And corn prices up quite dramatically. So these are really important again, to weigh in and to factor in, as far as what’s taking place behind the scenes. Some people are paying attention to as many people aren’t. This can really be a big, big item. Lumber prices if you’re thinking about building and may not be at the time, as far as the build today, prices have pretty much gotten up out of hand as far as lumber prices alone.

Redrick Terry:
Absolutely. So how likely is it that these pricing dynamics continue?

David Nelson:
Yeah. Hard to say exactly, but our best guess meets are somewhere in the two to three year range. Probably. We think that the big term that the federal reserve likes to use is, this is transitory. Meaning that it’s temporary. It’s just, it’s kind of moving through the system. We’ve seen the spike, because again, the comparisons are coming off of the lows, give or take a year ago. And if you use the lows a year ago, things can kind of look a little out of whack. Again, they were higher. We had the massive drop. Now we’re seeing things rally. And so the transitory aspects of that can really help people, they could help them make bad decisions. And we don’t want that. Housing is probably the biggest item that people need to pay attention to today. And again, if you’re going to be constructing anything, whether it be an office, whether it be a home, you might want to wait a little period of time, if you can, and things out of cool back down to some degree as far as from the levels that we find ourself at today.

Redrick Terry:
Good advice and information as always David Nelson. We thank you for being with us today.

David Nelson:
Thank you Redrick. I appreciate it.

Redrick Terry:
And if you missed any part of our discussion, we will make it available to you at ourquadcities.com.