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      09-27-2021, 07:53 AM   #30

Drives: 2018 230i
Join Date: Dec 2020
Location: CA

iTrader: (0)

Originally Posted by 2000cs View Post
assume inflation is back and will run for at least a decade. Say averaging 5-6% but could be higher.
I think the premise is unrealistic. I just don't see the US economy experiencing 10 straight years of 6% inflation. On a ten year horizon, I am more concerned about federal budget deficits, and the impact of politics on the management of our economy than I am about persistent inflation.

What would I invest in, and what would I divest from, if I was expecting a decade of moderate inflation? Yes, equities as observed above. If I was expecting persistent but unpredictable rates of inflation, I'd steer towards business that can pass along price increases. With the greening of the economy and infrastructure spending, Utilities might be an opportunity, but combined with the frequency of extreme weather events we're seeing and lethargic regulatory agencies it is a sector I would probably avoid.

In terms of bonds, you could look at TIPS. There are ETFs and funds for TIPS.

Crypto is a puzzle to me. Personally, I am not investing in it. It seems so risky and speculative, I have trouble seeing it as a rational investment, and there are apparently hacks of some of the exchanges. Also I'm surprised China was the first to ban crypto, and my understanding is they've banned both mining and trading. Who is next?
Appreciate 2