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Published: Aug 19, 2022 4 min read

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Scared that your investment portfolio might not keep up with soaring prices? You're not alone.

The top concern among investors now is that the rate of return on their portfolio won't keep up with inflation, according to a recent survey from financial company Principal. The other big fears from investors were extended periods of investment losses and not knowing who to trust.

The online survey fielded in May included responses from nearly 700 workers who have a retirement plan with services by Principal.

"Investing can often be an emotional experience, filled with questions and concerns," the survey authors wrote.

That's especially true now for a lot of investors who are coping with soaring inflation as well as a volatile market.

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High inflation and stock market volatility

The consumer price index (CPI), a measure of price changes for a variety of goods and services, jumped 8.5% in July from a year earlier, according to data from the Labor Department. While that's a slowdown from June when prices rose 9.1% from the previous year — a four-decade high — the costs of everything from groceries to cars are still uncomfortably high.

Soaring inflation has taken a toll on financial markets as investors assess how much and how often the Federal Reserve will raise interest rates. The central bank tends to hike short-term interest rates when inflation is high in order to cool economic activity. While doing so can help bring down the price of goods and services, it can also crimp prices for financial assets like stocks.

Amid rising rates, the S&P 500, an index commonly used to measure how U.S. stocks are doing overall, fell into a bear market in June. Though it's recovered some of its losses, the index is still down around 12% from the beginning of the year.

So understandably, investors sometimes don't feel good about having to make investing decisions in this environment. Over 50% said they feel uncomfortable when they have to do so, and fewer than 30% feel positive about making investing decisions, according to Principal's survey.

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Investing strategies to cope with inflation

If you're worried about the toll inflation will take on your portfolio, try not to panic and make impulsive changes. Generally, financial advisors recommend maintaining a long-term approach to investing, even when times — and looking at your big bills — get tough.

Stick with a strategy that takes into account your risk tolerance, timeline and goals, whether that be saving for retirement, a house, a child's college education or another big milestone.

Still nervous? One option to consider is the Series I Savings Bond. Also known as the I bond, it's an inflation-adjusted investment that provides a place to put your savings so they're shielded from soaring consumer prices as well as the volatility of the stock market.

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Rates are subject to change. All information provided here is accurate as of the publish date.