What Investments Are Suitable When Inflation Persists?

by | Apr 22, 2023 | Invest During Inflation | 28 comments

What Investments Are Suitable When Inflation Persists?




The real rate of inflation is likely higher than what the government of the Fed. Regardless of the official number, we have to do our best to keep up with it, and hopefully beat it if possible.

As Warren Buffett said, Rule #1 is do not lose money. This is the rule that almost all retail investors break. We need to learn about Risk Parity. Risk Parity is what Ray Dalio talks about, to weather the storm we need assets that provide cash flow regardless of the economic conditions.

What I’ll discuss are just some options that investors are looking at right now.

More money has moved into Money Market Funds which are essentially cash. The idea is that not making any profit is better than losing money. It also provides easy access to capital when you’re ready to deploy. This generally shouldn’t be a large percentage of the total capital invested at any given time as we know we’re losing to inflation.

iBonds are interesting because they can offer a high rate of interest, and at the time of this video they’re giving 6.89% on a government guaranteed investment. The only fine print here is that there’s a maximum of $10,000.

Short dated Treasuries have been looking much more attractive recently. In the case of 6 month US treasuries, at the time of recording are at nearly 5.1% interest. Reinvesting the interest every 6 months, and assuming inflation remains high, could be beneficial.

Gold and precious metals do not provide cash flow but are valuable in times of inflation over very long periods of time. They should not be ignored entirely.

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Real estate can be a way to produce cash flow, even as inflation takes hold and the asset value declines. Always remember to factor in all 4 ways real estate makes money including Depreciation. This is a phantom loss on a property than effectively puts money in your pocket. If the asset was purchased properly, and is cash flowing, it can provide income that outpaces inflation. Make sure to buy in landlord-friendly areas only.

But if it was me, I would invest primarily in different businesses, especially eCommerce. There’s no better way to have all the benefits of an income producing asset, tax advantages, scalability, and geographical diversification.

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#money #inflation #investing #gold #silver #realestate
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LEARN ABOUT: Investing During Inflation

REVEALED: Best Investment During Inflation

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As an investor, inflation can pose a serious threat to the purchasing power of your money. Inflation occurs when the prices of goods and services rise over time, reducing the value of your money. If inflation is expected to remain high or rise further, it’s important to identify investment opportunities that can protect your portfolio and potentially offer returns that outpace inflation.

Here are some investment options you can consider if you believe inflation will stay high:

1. Commodities
Commodities like gold, silver, and oil are often viewed as a hedge against inflation. Their prices tend to rise when inflation is high, as they’re considered tangible assets that are in limited supply. Investing in commodities can be done through mutual funds, exchange-traded funds (ETFs), or by purchasing them directly.

2. Real estate
Real estate has historically provided a reliable hedge against inflation. Investing in real estate can be done through purchasing physical property or through real estate investment trusts (REITs).

3. Stocks of companies with pricing power
Certain companies have the ability to raise prices on their products or services so that they remain profitable despite rising inflation. These companies are often referred to as having “pricing power.” Look for companies in industries such as healthcare, utilities, or consumer staples, which tend to maintain consistent demand regardless of market conditions.

4. Treasury inflation-protected securities (TIPS)
TIPS are bonds issued by the U.S. government that are designed to protect against inflation. The bond’s principal is adjusted for inflation over time, so the investor’s return on investment is guaranteed to keep pace with inflation. While TIPS offer lower returns than traditional bonds, they do provide a higher degree of inflation protection.

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5. Foreign currencies
Investing in foreign currencies can offer diversification benefits and potentially hedge against inflation. Look for currencies of countries with stable economies and low inflation rates.

It’s important to note that while investing in these options can offer protection against inflation, no investment is completely immune to market volatility. It’s essential to do thorough research and consult with a financial advisor before making any investment decisions.

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28 Comments

  1. Pomelog

    Great video GPS! greetings from the eternal 282 club now the 287

  2. Kc Jones

    Her success story is everywhere. I keep on hearing Riley name being mentioned here and other platforms, Does she really worth the credits and reviews?

  3. Black Knight88

    Supposedly inflation is going down. Lol. Yeah right. Bacon up today at lob laws up 25% Meat up at Costco today 20%

  4. Hannah Marie

    My greatest happiness is the $28,700 profit sent to my portfolio every 10 days recently.

  5. cautv3na

    What are your thoughts about Jepi ?

  6. B Richards

    I am SO done w/ the stock market. Hard pass.

  7. Le0

    other sources of income/hustle videos or business related

  8. MenasMusic

    What is the best way to invest in gold ETFs or physical?

  9. Brendon Masters

    Will your Amazon course detail product conception all way to retail store or more taking an existing item and re selling? I have an item I think has potential as there are no other like it selling in it's category. Thanks dave

  10. Merlin Wizard

    I come here for the truth.

  11. Merlin Wizard

    78th, 23 February 2023

  12. 1linkbelt

    Go for T Bills and I bonds. (for now)

  13. INTERNETVID

    For the I Bonds, that's 10K maximum per YEAR.

  14. David Hyatt

    Tuesday I started buying Oil, Natral Gas, Gold, Silver and Copper mining stocks. Selling my puts and converting to real commoditie stocks. All of these pay excellent dividends…

  15. GATO  NOTURNO FF

    Great stream, as always. I appreciate the level-headed approach you take to the news and the markets. Most people believe that investing in crypto and stock is all about holding till it rises, with the last crash in the market and recession. We should know that long term price predictions are very difficult to achieve. It's better to trade short term and make profit. Tobias Meylan got me cover as I am comfortably making up to 10 BTC monthly.

  16. Andrew

    I went all in crypto then my account got hacked now I'm sleeping on the street

  17. Scott Maxfield

    This transitory inflation is a bit@&

  18. Mark Wegner

    I came here for the truth!

  19. R 2021

    Gold, Silver are currency (cash) like a Federal Reserve Note (currency), they don't pay interest.

  20. Charles Turner

    Dividends and silver(gold if you can afford it). That's what I'm pushing

  21. Shut The Fuck Up Karen

    I think the best place to park your money is land, animals, tools, guns, ammo, medicine and getting self sufficient.

  22. Jeff Harbaugh

    My investment broker said I should buy ammo, canned food and bottled water…lol

  23. Jesus

    Invest in Russian weapons companies.or in language learning skills such as Russian and Mandarin .once the US goes broke those that allowed the US to borrow the money will be coming for realestate bin payback .

  24. The Money GPS

    Question from the chat was ​Should I pay out a rental property? If you mean pay it down? if you have secured that debt for the whole term, you feel very secure that your tenants will always pay, no history of moratoriums in your area, you can go with having the tenants pay that down. If there's any concern, paying down debt will give you peace of mind.

  25. Chris Lambert

    Inflation is from one place and one place only, it has its source & origin in Government printing Cash and distributing this through so-called quantitative easing. Governments have only one option to stop inflation they must "bring in the Cavalry" the cavalry is INTEREST RATES ! ! This is to bring in & harness the money supply, but Governments must also reduce spending. If Inflation is measured at 10% then Interest rates must be raised to above this, say 12% or perhaps 14% for a short time. After some years once Inflation has been controlled and brought down, interest rates can be normalised to something like 7% 8% or 9% this is normal, what we have right now is still an abnormal interest rate, 4% base rate is an abnormal and it is an emergency rate. Once any Government begins this policy (and the USA have not yet begun) it will soon "expose" their statistics as true or not, that is if Governments say Inflation is 10% but actually it is 15% then an interest rate up to 12% will not deal with inflation . . . Governments get exposed

  26. BlockChainChat.Crypto

    Great content as usual $GPS, Thx! TapLike &Comment 4AlsAll

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