I expect to see more questions for the Ask the Piggy Bank feature as we head into continued economic uncertainty. Today’s question, which is especially timely, is this:

What is stagflation?

This word has been floating around for a few weeks, but it’s really becoming prominent as Fed chair Ben Bernanke denies that it is happening. Here is a basic look at what stagflation is:

Stagflation is the combination of two words: “stagnant” and “inflation.” It is used to describe economic conditions in which growth is slow (or virtually non-existent), even though inflation is in effect.

Stagflation is considered a phenomenon, since inflation is usually coupled with economic growth. The rise in prices, coupled with the lack of a requisite increase in spending power by consumers, is what makes stagflation so dangerous.

If you are an investor that goes in for the long-term, and may not be especially keen on the short-term trading, the WOW factor may not be what you are looking for.

In investing terms, stocks with the WOW factor may be seen as “growth stocks.” These are stocks that offer returns that might make you say WOW. These are stocks that beat the market average by a fair margin. But in times like these, with stagflation on the horizon and worries of a recession mounting, WOW can easily turn into something quite the opposite.

When choosing an investment, it is important to look at your personal needs. And it can be a good idea to look at the current economic climate. While now is definitely a good time to buy (remember: “buy low, sell high”), what you choose could make a big difference.

Venerable stocks that have weathered past storms are more likely to make out intact than are WOW stocks that dazzle for a little while before fizzling out. The returns on a long-term investment plan focused on blue chips may not offer sexy returns, but they are more likely to survive the current market troubles.