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Hi Do, Here are Todd’s latest fun picks to take your financial skills to the next level... Inflation is here, and it changes the rules of investing.
Granted, the current high inflation rates (8.5%) are supply driven and should work themselves out with time, but still-high levels of structural inflation lurk in the background that are likely persistent.
The reason I spent a lot of time preparing my Expectancy Wealth Planning community is because inflation creates a topsy-turvy, Alice-in-Wonderland investment environment. Few people understand the implications: Your portfolio can rise in nominal value with price gains, but you still lose purchasing power in real terms net of inflation and taxes. The greatest asset in your real estate portfolio could be the mortgage debt because it's a synthetic short on your currency that declines in real terms with every nominal monthly payment. You expect the "FED put" to save the day during market declines, but suddenly the FED is playing by a new rule book and does the opposite. You expect bonds to provide diversification value to your portfolio and rise during stock declines, but suddenly both assets correlate to the downside.
The list goes on...
Inflation is part of a game plan called "financial repression" that the government is already implementing to manage it's horrendous debt situation. This isn't a prediction. It's happening in front of your eyes right now and was fully understood well in advance of recent developments.
Do you remember the Dan Amerman article shared a few weeks back explaining the Taylor Rule and how the FED is laughably behind the curve in raising interest rates? That's not an accident. The FED knows interest rates should be in double digits right now to properly combat inflation. It's overt financial repression.
The first two resources today explain what financial repression is, how it works, and what to expect.
And the good news is there's a proven strategy to manage your portfolio during inflation (and normal times as well!). I provide you with links to both the research and the resource that makes implementation turn-key easy.
Epochal change means we've entered a much tougher investment environment than the past. There's both more risk, and more opportunity.
When you understand what's happening now and how to manage the risk, you can harvest the opportunity.
Enjoy!
This article delivers a concise primer on financial repression - what it is, how it works, and why the government is creating it. Please keep in mind when reading this article that financial repression is only one component of epochal change, albeit an import one. Russell brings the general concepts of financial repression forward to current times. Note the 2021 date of this interview and the 2020 date for the above resource, and notice how the facts have transpired as forecasted. However, be careful in taking the analysis too literally. My call for epochal change includes several layers as shared in the past (and future) issues of this newsletter. Financial repression is just one, albeit, an important one. This is an easy-to-read compilation of two research studies showing trend-following is a proven all-weather strategy that performs during both inflationary and stable market environments, but does particularly well during inflation. The challenge most investors have is trend-following is difficult to implement on your own. This software is a done-for-you solution that makes adding trend-following to your portfolio easy-peasy. It combines the cost savings of passive index investing with the risk management of trend-following and the asset selection algorithms required to navigate inflation, stagflation... and even normal economic times. I also include a complete education system when you purchase using my affiliate linkthat shows you step-by-step how to apply these systematic portfolio management systems the smart way. Make sure you harness inflation for your benefit rather than passively let it hurt your portfolio.
Onward and upward!
Todd Tresidder
Two Solutions For Epochal Change: This investment software solution shows you how to sleep peacefully and secure your financial future in good times and bad. I use the same to manage my own money, and my clients are loving the results they're getting. My flagship Expectancy Wealth Planning master course shows you how to maximize the expected growth of your wealth in every market condition regardless of epochal change. It's timeless wisdom that works in all economic environments... including today's. |
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