On this edition of Quartz Smart Investing with Merrill Brown, how an inflation sensitive ETF could protect you in a coming recession. John Davi, founder, CEO, and CIO of Astoria Portfolio Advisors, tells Quartz how he might invest during a period of extended inflation.

#recession #investing #inflation.

—
Subscribe to the Quartz Daily Brief newsletter, the most interesting news from the global economy:

Become a Quartz member to get unlimited access to our journalism:

Quartz is a guide to the new global economy for people in business who are excited by change. We cover business, economics, markets, finance, technology, science, design, and fashion. Visit us at to read more, and follow us on Twitter at …(read more)

LEARN ABOUT: Investing During Inflation

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing

In times of economic uncertainty, it’s important for investors to consider their options and look for ways to protect their portfolios. One way to hedge against the effects of inflation and potential recession is to consider investing in an inflation-sensitive ETF.

An inflation-sensitive ETF is a type of exchange-traded fund that is designed to track the performance of assets that typically hold up well during periods of inflation. These assets can include things like commodities, real estate, and inflation-protected bonds. By investing in an inflation-sensitive ETF, investors can potentially protect their portfolios from the negative effects of rising prices and a weakening economy.

During a recession, inflation can still be a concern, as central banks may look to enact policies to stimulate the economy, which can lead to higher prices. This can erode the value of traditional assets like stocks and bonds, making an inflation-sensitive ETF an attractive option for investors looking to protect their portfolios during a downturn.

Commodities are often a key component of inflation-sensitive ETFs. During times of economic uncertainty, commodities like gold, silver, and oil have historically held their value or even increased in value. By investing in an ETF that tracks the performance of these commodities, investors can potentially benefit from their stability and resilience during times of inflation.

Real estate is another area where investors can find protection from inflation. Real estate assets can provide a hedge against inflation, as the value of physical property tends to rise with prices. Inflation-sensitive ETFs that include exposure to real estate investment trusts (REITs) can provide investors with a diversified way to gain exposure to this asset class and protect against inflation.

Inflation-protected bonds, also known as TIPS (Treasury Inflation-Protected Securities), are another key component of inflation-sensitive ETFs. These bonds are designed to provide investors with a hedge against inflation, as their value is adjusted based on changes in the Consumer Price Index. By including TIPS in their portfolios through an ETF, investors can potentially benefit from the protection they offer against rising prices.

Overall, an inflation-sensitive ETF can be a valuable tool for investors looking to protect their portfolios during a potential recession. By diversifying their portfolios with assets that have historically held up well during periods of rising prices, investors can mitigate the impact of inflation on their investments and potentially even benefit from it. As always, it’s important for investors to conduct thorough research and consult with a financial advisor before making any investment decisions. However, an inflation-sensitive ETF could be a smart addition to a well-structured portfolio in preparation for a potential economic downturn.