Headlines surrounding the Bank of Canada’s September rate hike, which caught many participants by surprise, continue to be dominated by what Douglas Porter, chief economist at the Bank of Montreal, called an “epic fail” in communications.

Traders focus obsessively on the BoC’s eight annual policy interest rate announcements due to the impact they can have on asset prices.

And the inevitable need to respond to client questions means advisors have to follow the BoC’s daily dramas, too.

Yet advisors would have been better off focusing on a more important Bank of Canada event last week, which went largely unnoticed by the mainstream media.

Inflation targeting: huge implications for investors

A day-long conference dealt with the BoC’s inflation targeting mandate, which is set to be renewed in 2021. The event, which brought together international economists, central bankers and academics, has huge implications for investors due to strong historical correlation between inflation and interest rates.

The BoC and the Trudeau government came under considerable criticism from monetary policy experts for not being more open when they renewed the targeting agreement in 2016.

Stephen Gordon, an economics professor at Laval University, called fixing the BoC’s inflation target within a 1% to 3% range “the most important decision that the finance minister made.” At a minimum the House of Commons Standing Committee on Finance should have been consulted, Gordon said.

The trajectory of long-term inflation and interest rates affects investment advisors in two ways that may not be obvious.

For one, if the BoC renews its five-year inflation targeting mandate in 2021 as expected, this would imply that interest rates could remain lower for much longer than anyone currently expects.

However, maintaining interest rates at a low level is unlikely to generate the same simulative effect as cutting them did. This suggests that advisors need to coach their clients to save far more for their retirements than they are currently planning.

Read: Your guide to inflation-proofing clients’ lives

Secondly, many retirement-saving models that advisors use with clients exclude inflation. That may have been OK decades ago, when Canadians worked longer and died earlier.

But if inflation averages 3% during the coming quarter century (the upper end of the BoC’s current target range), an investor who retires today at 60, buys an annuity and lives to 85, will see the purchasing power of his annual payment decline by more than half during that period. That too suggests that investors will need to save more.

Read: BoC monitoring protectionism, innovation

Following the BOC long-term: not much easier than following it short-term

The bad news is that following the Bank of Canada’s long-term moves is just as hard as following its short-term fluctuations. One conference presenter, Kevin Carmichael, a senior fellow at the Center for International Governance Innovation, described the BoC as “the least transparent of the world’s major central banks.”

Read: BoC governor’s communication approach under scrutiny

Carmichael has a point. Unlike the U.S. Federal Reserve, the Bank of Canada doesn’t publish a transcript of its policy discussions, nor does it inform the public about how members of its Governing Council voted on key decisions. Stephen Poloz, the BoC’s governor, also holds fewer press conferences than does his Fed counterpart Janet Yellen. And Carmichael calculates the BoC’s deputy governors give fewer speeches than Fed board members do.

That said, the effort needed to track the Bank of Canada’s strategic orientations is more than worth it.

Research shows that investors who adopt a buy and hold strategy outperform those that trade in an effort to beat the markets.

This suggests that investment advisors who broaden their reading to include analyst reports and publications such as the Economist and other magazines that take into account central banks’ long-term, as well as their short-term moves, should also perform better.

In future columns, we’ll do the same, looking at who really controls the BoC, its independence and how its policies affect asset prices.

Also read: How the Bank of Canada is failing investors (a 2015 op-ed on the BoC’s communication strategy)