Archive for November, 2012

Inflation hedge & protecting purchasing power

Thursday, November 8th, 2012


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Investors may be able to offset potential erosion of purchasing power through exposure to asset classes that offer ownership of real assets or claims on real earnings, hedging dollar weakness and import price inflation, and income growth enterprises.

What about TIPS?

For ten to fifteen years some proponents in the financial media have suggested TIPS but Treasury Inflation Protected Securities have not fared well as a form of inflation protection…

As of 9/30/12 for example, 5-year TIPS yields were negative (source: Bloomberg data)

What has fared well you may ask?

Commodities

Currencies

Real estate

What else has potential?

Global equities with dividend growth

Senior floating rate loans

Ideas as reference point: (indices are not managed and cannot be purchased by investors)

S&P Goldman Sachs Commodity index

NCREIF Property index

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What do you say? What’s on your list?

 

C o m m e n t s @ s t o c k t r a d e r d u d e . c o m

 

 

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