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In addition to this request ... my main concern lately is inflation. My suspicion is the next major North American crisis will be inflation. I see this already

In addition to this request ... my main concern lately is inflation. My suspicion is the next major North American crisis will be inflation. I see this already with housing prices in hot markets (SF, NY, Vancouver, Toronto) and the wages for high-tech workers in those markets. A good salary went from $150k to $500k a little bit too quickly, IMO (but maybe I'm just a grey beard and my sense of time is skewed). Given that the already low interests rates are likely on their way back to zero, and given China does not seem keen on continuing to fund the US through bond purchases (why would they if the US is engaging them in a trade war?), it seems high inflation is one possible result. What is the investment strategy in times of high inflation?

Wellshit 7y ago
Gold, RE
mrfredward 7y ago
To answer your question, if you're expecting a jump in inflation that others don't see coming, the key is not to own debt. Stocks can take a short term dip on inflation because it's bad economic news, but in the long run businesses will end up operating with proportionally higher revenues and expenditures, and as a result end up with proportionally higher stock prices. Real estate should go up proportionally (at least in theory). Gold sometimes jumps as people get into a "run for the hills" panic mentality. Debt, however, will be paid back in a now less valuable currency, so you'd be locked in to an inflation adjusted loss. Now to answer the question you didn't ask: most people who study the matter are more worried about deflation than inflation in the developed world, and making your whole investment strategy a big bet that economists, hedge-fund managers, and world leaders know less about the economy than you (and/or the pundits you see on TV) is usually not the way to go. Picking a boring mix of stock and bond index funds and sticking with it often serves people better.
kitten_smuggler 7y ago
Buying Bitcoin
- Izkata 7y ago
  Almost all of bitcoin's lifetime has been after the last recession, so I am really curious about what'll happen here.
ericd 7y ago
Generally, gold performs well in high inflation. Stocks and Real Estate have a much shakier track record there.

Wellshit 7y ago

Gold, RE

mrfredward 7y ago

To answer your question, if you're expecting a jump in inflation that others don't see coming, the key is not to own debt. Stocks can take a short term dip on inflation because it's bad economic news, but in the long run businesses will end up operating with proportionally higher revenues and expenditures, and as a result end up with proportionally higher stock prices. Real estate should go up proportionally (at least in theory). Gold sometimes jumps as people get into a "run for the hills" panic mentality. Debt, however, will be paid back in a now less valuable currency, so you'd be locked in to an inflation adjusted loss. Now to answer the question you didn't ask: most people who study the matter are more worried about deflation than inflation in the developed world, and making your whole investment strategy a big bet that economists, hedge-fund managers, and world leaders know less about the economy than you (and/or the pundits you see on TV) is usually not the way to go. Picking a boring mix of stock and bond index funds and sticking with it often serves people better.

kitten_smuggler 7y ago

Buying Bitcoin

Izkata 7y ago
Almost all of bitcoin's lifetime has been after the last recession, so I am really curious about what'll happen here.

ericd 7y ago

Generally, gold performs well in high inflation. Stocks and Real Estate have a much shakier track record there.