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Like most self funded retirees, we are having to climb the risk curve to find some income, even for the “safety net” component of our portfolio, which has been mainly in term deposits.
I see clear signs of some significant inflation on the horizon. This presumably will push up market interest rates? do you agree? If so, the likely effect on equity markets will be negative. In an inflationary environment, what is the best asset class to focus on?
Within that asset class, do you have any suggestions.
A: Notwithstanding the “signs”, I don’t share your concerns about inflation. I feel it is transitory, and “digital disruption” is a hugely moderating influence on companies rising prices.
Gold for inflation bulls.
When long term bonds have risen in yield and short term rates are rising to “slow the economy”, long duration bonds.
There are some stocks that could win, including those with real pricing power. Insurance companies, who can raise premiums and benefit from higher bond rates, could also be winners. A company such as Challenger could be a winner.
