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What are the best investments in an inflationary environment?

May 30, 2009, 12:06 am
Investments
dp asked:


TIPS? Commodities? Foreign currency ETFs? Thanks in advance for any thoughts.

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Category: Investments

4 Comments

  1. Jose E:

    Some investment “experts” recommend that you buy stocks in companies that might do well overseas regardless of our domestic economy. Gold, silver and other commodities do well during inflation also. Diversity in foreign currencies might be a good idea, but only to a certain extent. If the American economy enters a severe depression, currencies around the world would be hurt as well. In this case, gold would not only hold its value well, but would probably enjoy a good increase in value.

    June 1, 2009, 10:29 pm

  2. Stan G:

    Real estate, you can’t go wrong buying land. The prices may fluctuate, at the end of it all, you’ll still make money. (Especially if the land is around a waterway and underdeveloped )

    June 5, 2009, 6:27 am

  3. muncie birder:

    Ken gives excellent answers, but I find myself having to disagree that TIPS are a good inflation hedge. They have very serious drawbacks. One being that their value is calculated based on government inflation numbers which I believe are grossly understated. Second the inflation adjustment to TIPS is taxed annually although not paid but added to the value of the bond. Nothing worse than being taxed on income you have not made yet. I love the government.

    In an inflationary environment real assets are a preferred vehicle for keeping up with and beating inflation. Unfortunately, the best real assets to protect one are normally beyond the budget of the ordinary investor–painting by classical masters. Do they ever soar during inflationary times. A Dutch master would be a very good investment. Collector coins have also tended to do very well during inflationary times. You will find it very difficult to beat the price increase of a MS 63 1909 svdb penny. They are also fairly convenient to store and fairly easy to liquidate if they are slabbed.

    I tend to believe that oil related investments should do very well not so much because we might be in an inflationary environment but because there is rising demand and deminishing supply. I love it when analysts forecast the price of oil at $60.00 a barrel in 2009. I would not rule out the possibility, but I certainly would not be forecasting it.

    June 8, 2009, 1:19 pm

  4. evermore:

    Trading gold

    You can open an free Marketiva forex & gold online trading account , with $5 reward and $20000 virtrual fund for practice .Just click the following link to open an account.

    June 11, 2009, 9:44 pm