Keep Time Working for You

Can you recall a time when a kilogram of ground beef cost just $3.63? It may seem inconceivable today, but that was in 1996, just 30 years ago.¹ This spring, when the price of a cucumber made headlines after rising 28 percent year over year, it was another sobering reminder of inflation’s impact on everyday costs.²

For a brief moment, there appeared to be signs of moderation. To start 2026, markets had largely priced in the prospect of rate cuts. Fast forward to today, and elevated energy prices, protectionism, tariffs and global conflict have complicated the inflation outlook. The escalation in Canada–U.S. trade tensions at the end of the summer has added another layer of uncertainty. While the headlines may be unsettling, many economists expect the broader economic impact to remain relatively contained, though tariffs are likely to add to near-term price pressures.

The extent to which today’s inflationary pressures prove temporary or persistent continues to be debated. What is increasingly clear is that the structural backdrop has changed considerably from the decades-long era of disinflation. For central banks, persistent inflation complicates the balancing act between achieving price stability and supporting economic growth.

At the same time, investors are keeping record amounts of capital on the sidelines. More than $3 trillion is held in retail money-market funds alone, alongside another $4.8 trillion in institutional funds — pools of capital that have roughly doubled since the pandemic.³

There are understandable reasons for holding cash, of course, particularly when interest rates are elevated or uncertainty persists. But over longer periods, cash carries a less visible cost: the erosion of purchasing power. This is where time works against us. Even modest inflation has an insidious effect when compounded over many years.

Consider the past 30 years. Inflation averaged 2.16 percent annually over that period, modest by recent standards. Yet cumulatively, prices rose almost 90 percent, meaning that $1 million held in cash since 1996 may have maintained its nominal value, but its real purchasing power would have fallen to only about $526,600 in 1996 dollars.⁴

Put another way, at 4 percent inflation, you would need around $219 in 20 years to match the purchasing power of $100 today. While 4 percent may seem high, consider that certain expenses have risen much faster. Ground beef, for example, has increased by an average of 5.2 percent annually over the past 30 years.¹ For retirees relying on fixed sources of income, the cumulative effect can be particularly consequential, especially as retirement can span three decades or more.

History offers an important counterpoint. Over the same 30-year period, the S&P/TSX Composite Index rose more than 591 percent, meaning that $100,000 invested in the S&P/TSX Composite Index 30 years ago would have grown to roughly $691,000 today — and that’s before reinvested dividends.⁵ It is a powerful reminder of the value of staying invested over time.

Keeping capital productive can be one of the most effective ways to preserve purchasing power and participate in the growth that lies ahead. A disciplined investment program can harness one of an investor’s most powerful forces: time. Keep it working for you.

‍

^{1. Average ground beef price: $3.63/kg June 1996; $16.61/kg June 2026. StatCan T-18-10-0002-01 & T-18-10-0245-01; 2. www.cbc.ca/news/canada/vegetable-prices-canada-9.7173027; 3. www.ici.org/research/stats/mmf; 4. June figures. www.bankofcanada.ca/rates/related/inflation-calculator/; 5. S&P/TSX Composite Index, 5,044.07 at 6/28/96; 34,857 at 6/30/26.}

‍