Not exact matches
If you decide that you seek the diversification and
inflation - protection that commodities may offer, an ETF can be a relatively low - cost way to
get exposure to this unique
asset class.
A house is a real
asset, which acts as a hedge against
inflation,
gets preferential tax treatment and can take advantage of leverage.
The question that I have at this point in the cycle is how low the Fed will
get before they
get scared about
inflation, and flatten out policy to see which effect is larger — deflation from overvalued housing
assets purchased with debt, or
inflation of goods and services prices.
Monetary policy is loose, and as I have stated before, loose monetary policy typically ends in some excess, whether that excess is goods price
inflation, or
asset inflation, or perhaps a currency panic, where foreign creditors conclude that they will not
get paid back in anything near the terms that they expected when they originally lent.
You're projections need to account for:
inflation, expected returns (and an
asset allocation to
get you there), your ability to save, and your behavior along the way.
In addition to shortening its target duration, the revamped fund
gets to choose among «US government securities, corporate securities, mortgage - related and
asset - backed securities, convertible securities, municipal securities, structured products, preferred stocks and
inflation - indexed - securities.»
Plus you
get an
inflation hedge, tax relief and exposure on a risky
asset.
Given that the excess credit is heading for the financial markets, and not to the goods markets, we are
getting asset price
inflation, but not goods price
inflation.
The combination of real
assets allows investors to
get inflation protection without giving up portfolio efficiency.
Continued from here, and I guess here: I actually started writing this post the other day, but quickly
got side - tracked into a different post — after all, one can't really talk about real
assets without first taking on
inflation!
I'm sure you
get the point, your
asset needs to appreciate with
inflation in some way.
But what seems clear is this: The fiscal sugar rush that's ginning up growth in the short run could be setting the stage for a letdown later, especially if the Federal Reserve feels compelled to take away the punch bowl before
inflation and
asset prices like stocks
get too out of hand.
Lately I've heard quite a lot of talk about how it's time to
get out of the market and that
asset prices are over-inflated and the cost of capital too cheap (the root of
asset inflation).