TEXPERS members are trustees, administrators, professional service providers, employee groups, and associations engaged or interested in managing public employee retirement systems.

With headline inflation at multi-decade highs investors are rightly concerned and it bears an in-depth look. Some of the drivers of price rises have persisted longer than the Fed expected. But looking beyond the headlines at some of those drivers of the last twelve months could be useful.

In the world of safaris, “the big five” are highly prized among sightseers and photographers: the lion, leopard, black rhinoceros, elephant, and buffalo. But in investing, the big five could more aptly refer to the connected categories of growth, inflation, interest rates, valuations, and style.

2020 was an incredible year in the capital markets. However, in the wake of very strong performance for both stocks and bonds over the past 12-months, as well as the past decade, most traditional assets are looking expensive. At the same time, concerns over inflation continue to build, and questions about the trajectory of Fed policy dominate investment conversations.