Inflation isn't gone for good: Nobel laureate

Don't give credence to predictions that inflation is gone for good, said Nobel laureate William Sharpe. "Remember inflation [even though] you're assured by the popular press that there will never be inflation again," Mr. Sharpe told a group of advisers today. "Personally, I think there will be some" inflation in years ahead, he said at a regional meeting of the National Association of Personal Financial Advisors in San Diego. Mr. Sharpe, professor of finance emeritus at the Stanford Graduate School of Business, spoke on the topic of income-producing strategies to use for retired clients. He urged the NAPFA attendees to analyze the probabilities of when clients will die, together with the normal stress tests of investment strategies, and of course to keep inflation in mind. "Only show [probable] outcomes in real terms," Mr. Sharpe said. "It's beholden on you to take inflation into account." Mr. Sharpe admitted that he has no idea when inflation might return. "That's above my pay grade," he said. But the probability that the U.S. might experience some significant rise in prices "is not zero," he said. The NAPFA event, which had about 200 adviser attendees, is the group's first conference focusing on practice management and investments.