Article Category: Inflation

How to Think About Hedging Against Inflation

One of the topics that seems to be on the minds of investors right now is the idea of rising inflation. The recent global economic upturn, combined with a stimulative tax package, is causing some to believe that we're about to see the whites of inflation's eyes.

If that truly is the case, how should we handle this as investors? Should we move our portfolios into asset classes that have been deemed good "hedges" against inflation?

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Posted in: Federal Reserve Gold Inflation Interest Rates Volatility

More to Come?

Last year over $9 trillion was created in stock market value across the globe- a clear example of how and why stocks remain the best asset class for creating wealth.

How did bonds do?

Using AGG as a proxy - the ETF that tracks the U.S. Aggregate Bond Index - we can see that bonds provided a 3.45% total return (dividends included). This compares to a 20.78% total return for the S&P 500, evidenced by its ETF - SPY.

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Posted in: Bonds Dividends Earnings Economy Inflation Volatility

Drilling Down on Inflation

If you could predict where inflation would be during 2018, you'd have a good idea of where long-term interest rates will head, how monetary policy is likely to develop, and therefore how the equity and bond markets are likely to perform. With that information, you could make an informed decision about asset allocation within your portfolio.

In a recently released article by the Federal Reserve Bank of San Francisco, economists Tim Mahedy and Adam Shapiro took a stab at analyzing the underlying cause of the persistently low inflation we've seen since the end of the financial crisis.

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Posted in: Bonds Economy Federal Reserve Inflation Interest Rates

The Uptrend Continues

It's been a very bullish year, and yet major averages continue to attack their high-water marks time and time again. For many, this instills a sense of unease ... a feeling that things are too good right now, and won't last.

If you find yourself in this camp, take solace in the fact that ultimately you will be correct, it just might take longer than you expect. After all, people have been making this case for a number of years, and anyone who acted on that advice has missed out on a tremendous surge in asset prices.

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Posted in: Corrections Dow Theory Inflation Market Breadth Primary Trend

Three Concerns Plaguing Investors

Right now there appear to be three main sources of concern for bulls: high-yield bonds, the Transports, and the slope of the yield curve. Let's examine each of these individually to see if they warrant a change in our longer term outlook.

First up is junk bonds. Last week was the first time in eight weeks that major indexes posted losses, and that weakness may have been presaged by declines in junk bonds, as seen below.

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Posted in: Bonds Dow Theory Federal Reserve Inflation Interest Rates

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