High Inflation Investment Strategy
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- Опубликовано: 1 авг 2024
- Inflation is rising so many people are thinking about what will be the best high inflation investment strategy. They are looking for assets that not only give them protection but may actually generate a profit during a period of high inflation.
In this video, I discuss different ways of protecting and profiting from inflation, including buying Inflation hedged bonds (TIPS) and thematic funds that aim to benefit from a high inflation environment. I will also show you which equity sectors have historically faired best in low, medium and high inflation environments.
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Timestamps
00:00 Introduction
00:50 Inflation Linked Bonds
05:48 Equity as an inflation hedge
07:53 Equity Sectors & Inflation
11:13 Thematic equity funds
#Inflation #Investing #PensionCraft
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TIPS only coponsate for govermeant stated inflation not real inflation
Would love to know your ISA allocation of 2021 Ramin :)
Hi @@johndupont8596 I only discussed this recently with Patreon supporters (because they asked me to) and it's here www.patreon.com/posts/49775530 along with my reasons for what I'm doing. Thanks, Ramin
Great in depth video, I was a newbie in stocks when I made my first million, investing in Index funds & QYLD with a licensed broker I met at a trade seminar in Tx, & he agreed to trade for me.
Glad it was helpful @Carolina Soto
Hello, I'm new to wall street. How can I get in touch with your broker?
@@piercedaulton6987 Hi, you can look him up. *Dodai Neil* is my broker.
@@carolinasoto6222 Awesome, My friend from Houston, Tx told me of her successful investment with this same man Dodai Neil, & how he doubled her quarter million dollars portfolio in couple months trading for her.
ty. this is exactly what i'm looking for right now in this particular market.
Precise, insightful, clear. Making the complex simple! Wonderful stuff. Thank you 🙏
You're very welcome @Stigz Thankyou for the support
Wonderful video - my portfolio is currently being mangled by the "correction" and fear of inflation/rate hikes. I will shift toward those safe sectors and look at INFL - thanks!
Looking at these today, 10 months later, instead of protecting from inflation, these funds have all collapsed. For example, on the date this was posted, the VTIP closed at 52.47. As of today, 4/1/22, it's at 50.54. They should have been rising, given the inflation in progress. Instead, they are tanking. Especially today, they're all gaping down.
Truth is, when markets drop, bonds fall right along with stocks.
Thank you so much. It would be amazing if you could do a video on or comment on quantative easing or money printing and the correlation to inflation. Mark Faber talked about QE quite a bit and how it was disatrous for the buying power of money (favouring gold as a currency).
This was a succinct presentation. Well done!
Thanks @Anto Makeria
Loved the indept and technical video.
@Nav D - I am glad it was helpful. Thanks Ramin
Another incredible video. Is there anything about money and markets that you don't know?!
What is your opinion on shorting treasury bonds to hedge against inflation?
Awesome video! Where did you get the data from?
Please comment on SCHP v. TIPS v. CDs. Thanks. Btw, have learned much from your well presented clips.
Wow, the most informative of these I have read in a while, the inflation/CAPE graph was something I never even considered. Thank you so much!
Glad it was helpful @John Ashmore
Very informative - thanks. I understand from your summary though that since you think any inflation will be short lived, that you are not investing any differently than you would otherwise over a long term period?
Excellent video, once again. My only criticism of this and most all your videos is the font size in your charts. Perhaps in future videos you could make them a little bigger so we can see them better. Readability is very dependent on the device and viewing distance. These days there is a wide range of viewing options, not to mention viewer eyesight, and readability suffers on some of them.
Thank you for watching and sharing your views
Thx Ramin.
You're welcome @Scott Maughan
Hi Ramin, thanks for the very informative video as usual. Would you consider investing in property as an inflation hedge? I'm cognizant that property investing requires higher amounts, is lumpy in nature and is not easy to diversify. As an alternative, wouldn't Reits address those concerns?
Hi Ramin. What are your thoughts on the reverse repo transactions rising and the impact it may have?
He should have listed TDTT tips 3 year. It has been doing great 8.11% total return in the last year. The expense ratio is a little high(0.18%) but worth it.
if you dont see inflation on the horizon what about growth?
are we headed for low growth, low inflation. The two often go together
Shouldn't commodities be a good hedge against inflation ?
Bond linked to CPI are only worth considering if you trust the governments measure of inflation.
brilliant
Thank you @Rob Weinberg
Why aren’t the median values in the box-plot for the “S&P500” (right most group in the box-plot chart) netting to zero for all inflationary conditions? What does the spread between those medians and zero tell us about the broader statistical analysis?
Curious to know what you make of Ray Dalio’s all weather portfolio?
I'm new into investing, but i think we will see in the following months several market overreactions to inflation peaks, with some investors with the inflation itself in mind and others with the rising rates worries. Probably and acceptable strategy is staying calm with your portfolio and make no movements. Thanks for the content
Of the same opinion. Trying to predict the behaviour of an irrational market is itself high risk - much easier to get it wrong than get it right.
If you're confident in the stocks you own and you're invested with a long-term view, safer to just ride it out imo.
Very sensible ! Unless you know something that the rest of the market doesn't, you're better off staying put.
Wow this just happened
If you believe inflation is short lived then forget about complex hedging strategies and buy a low cost index tracker etf, drip feeding as you have have cash available. I know it sounds so simple but yet historically it beats practically everything else including real estate...
Its worth noting that 10 yr UK breakeven inflation at 3.6% is RPI, the BoE targets CPI at 2% which is typically 1% lower than RPI so the difference is only 0.6%. Admittedly still unlikely that BoE would let inflation average 0.6% higher over 10 years.
@James Smith sorry I didn't predict the Ukraine war.. you did?
Why does gasoline fall into consumer staples instead of energy? What did you include in your energy bucket?
Most analyses I have seen have shown energy benefitting from inflation. Would love to learn what you included in your definition.
You need a gold holding just as catastrophe insurance, regardless of inflation or deflation. Mine is at 12%, mostly Sprott units and Horizons gold ETFs. If the spit really hits the fan, everybody will be flocking to gold. You should do a video on the Dragon Portfolio which is supposed to do well in all markets, even a 1930s one. It's quite something, although it needs professional management to work because it includes an options hedging strategy benefit from major crashes and a commodities trend following strategy to exploit high inflation.
Royal London Short Duration Global Index Linked Fund is a good option for UK investors
Dear Sir, Can pls do the same with data in 1970-1980?
You've mentioned US domiciled ETFs before, but how is it possible for UK residents to invest in them without having to pay the 15/30% with holding tax?
Excellent video, well researched as always.
Thanks again @Stephen O Keeffe
👍🏻
What do you think about just increasing weight into UK Equity? It seems like many of the inflation-beating sectors FS, Mining, Energy, maybe not healthcare broadly but Pharmaceuticals, Consumer staples, etc are hugely overrepresented in the FTSE.
Thank you for mentioning the y axis. This kind of thing is helpful for when we're viewing on a small screen like a phone and can't necessarily see all the smallprint. Discussion of what is on the X and y axis can be useful as a way to get our bearings before launching into the analysis.
The quality of your content is probably beyond that of university lectures. Easy to digest. Good Job.
Wow, thank you that's very kind of you to say Curtis.
Very helpful video. Thanks a lot. Just subscribed. Would you be able to elaborate on why gold is not a suitable hedge against inflation? I have seen a lot of talk recently about how gold and silver are currently good investment choices and are set to increase in value significantly over the next decade in part due to inflation.
Hi @Francis Devlin I made a video called Investing in Gold and in it I explain using data why gold is not a good inflation hedge. If you watch from 03:16 you will see that after I talk about real yield & the price of the dollar as drivers, I show you why gold makes a poor hedge for inflation. Thank you for subscribing the link to the video is here ruclips.net/video/9qCmkr60JNM/видео.html
If you don't need food, shelter or transportation, inflation just might run at 2% for you.
Great analysis but this analysis is done, perhaps different than predecessors on a non-market driven (covid driven) recession for a market that was already going as bull for 10+ years. If there was no pandemic many was expecting a bear market and interest rates to raise anyway, for example if the bond market bubble would have been popped. So if those delayed bear markets to happen anytime soon and i feel the fed will go even negative interest rates and even more QE that would result even more inflation, hence the recovery for unemployment would go even to 7-8 years if not the unemployment targets are revised upwards
PFIX has done well with rising interest rates
Exactly the video I was looking for. Thanks Ramin!
Glad it was helpful @Ganok
so when inflation occurs, I should invest in commodities, real estate/land, agriculture, metals, healthcare, and data research? am I right or wrong?? please, help me understand.
You're right. Land historically for example has been an excellent hedge against inflation
I wonder what your thoughts are on an ETF like RPAR that tries to diversify by economic situation and not by asset. It seems like an interesting idea.
Basically what you're saying is that during high inflationary periods, the non-discretionary spending does better than discretionary spending.
That's right @stevo728822
Genius!! 😂
REALLY LLIKE YOUR VIDEOS. VERY WELL DONE, SUBSCRIBED AND LIKED. You are explaining the entire process, usually I start at the balance sheet, or valuations then sentiment. But your view is taking it a step further and helping forecast by understanding the economy more robustly
Awesome, thank you!
1970s gold and silver 🙂
Hi Spencer D if only the US dollar could come off the gold standard again...
Is there an ETF of Golden Butterfly portfolio?
Hi @sanjeevp not that I know of, but if it gains in popularity then I don't see why there shouldn't be one. Thanks, Ramin.
You chart sector return vs inflation from 1999? We haven't had a real inflationary period since 1974-1982. The charts are meaningless.
The truth you speak 🤑
Top cool Black gear Raminbo
The fed can absolutely lower inflation but the cost will be the stock market, grab your pop corn and get ready for the showdown lol
Hi Spencer D the past certainly bears that out. The biggest shock for the stock market comes with a sudden and unexpected rise in the policy rate and if the starting rate for the hiking cycle is already high. At least this time round we're starting from the zero bound which means it's not such a negative story for equity. Thanks, Ramin.
mother of all bubbles
"Gold is erroneously considered to be an inflation hedge." Why erroneously?
I had been subscribed to your channel for a long time but seem to be unsubscribed, not by my own choice!!
Sorry to hear that @DC we can't do that our end but RUclips may have been tinkering. Thanks for being a loyal subscriber. Ramin
@@Pensioncraft I have had the same issue FYI
I bonds baby!
"Gold is erroneously considered to be an inflation hedge" ??? Please expand on this.
Because of the purchasing power of the dollar goes down through inflation, people turn to another source of wealth such as precious metals Expeccially gold. It’s recommended when there’s extremely high inflation (hyper inflation look it up) personally I feel like crypto will be better cause no one is gonna go around stores buying things with actual gold but that’s just if things get worse
@@martinlopez4719 The operative word in my question was "erroneously".
@@GrayGhosting Numbers don't bear out gold being a reliable hedge against inflation. But..numbers DO bear out gold behaving inversely to stocks and bonds when those securities experience rapid downward movement.
You only need to look at what happened with gold prices in the last high inflation era of the 70s....gold was a lousy investment and underperformed stocks by a wide margin.
@@bluegtturbo Gold blew way stocks and bonds in the 70s. The real price of Gold tripled between the mid 70s and early 80s. Over the last 12 months of this inflation crisis the real price of gold is up 2.6% which is way above the negative returns from bonds. Gold has gained 50+% in value over the US dollar in the last 40 years.
Best performing asset in an inflationary environment? Fixed rate debt! it’s a shame mortgages in the U.K. are rarely available fixed for terms over 10-15 years.
I would have thought anything fixed rate would be undesirable against inflation?
what are you talking about!?
Fixed rate debt is fixed at an interest rate that reflects the rates today not the possible inflationary rate of of the future. Watch the video again
Just switched my morgage to 15 year fixed 1% intrest rate... dont think Rates can go lower then available now
@@wolfiestreet6899 He means taking out a mortgage at fixed rate, not buying bonds. And he is right, as long as wages also increase.
It's an idea but means no flexibility if you wanted to sell due to redemption fees and in this trange world who knows rates may even go negative!
Last 4 months has been crazy, the FED was keep pumping the market, so I use my setup also to see if there is unnormal moves in the market. But it seems the FED is taking break from pumping the market. They may continue or may not. S&P 500 grows by 11% - 15% a year. It's only been 5 months and S&P 500 is already at 15%. This is clear a signal of being overbought. Since the covid market crash the price OF S&P grow by 100% :D. Where do we go from here, is the question. I believe there is going to be at 10% correction. Last week we saw 5% correction and there is more to come. The means May and April and June are the bullish month.
What do you guys think? I am not even mentioning inflation but what about deflation?
12:28 Do you have data on these sectors' performance in high-inflation environment? Please elaborate! All I hear is "in theory" "in theory" "in theory".
Show me data or at least explain the theory.
How come finance companies such as lenders are benefiting from inflation. If high inflation comes, principals get deflated...
@@vosyem So now is the time for mortgage takers to change to a fixed interest rate.
@@goncaloaguiar Well yes, they should be taking advantage of low rates anyway imo. There is far more scope for rates to rise than decrease further!!
Banks , Oil , GOLD LOL
good video,!. what about investing in china ?
I'm rich. County Tax Assessor says my house value has doubled!
Where's your idea?
This will become a classical.
“Transitory” eh? ;p
I guess we'll see. I've been working on my unexpected inflation (inflation over any expected inflation) playbook this very week. I'm not instigating it yet though, I've got triggers laid out for that.
8:50 Quite useless because you didn't clarify what is considered as "high inflation". I see the data only goes from 1999 to present, during which inflation was always low. It's almost like the authors wanted to deceive because all the data on the S&P500 is there going back to 1871!
Investing in crypto now should be in every wise individuals list, in some months time you'll be ecstatic with the decision you made today.