Sadly, after failing to keep mainstream investors from losing their shirt not once but twice, I found a front-page story from Forbes (c/o of Yahoo Finance) that, if followed, will prove costly to both one’s wealth and portfolio. The piece is 6-ways retirees can beat inflation.
Now I am no expert when it comes to retirement investing so I can’t tell you if annuities or TIPS are adequate or not. What I can tell you is that I am an expert on inflation and that this article is either incomplete or extremely negligent.
How can one talk about beating inflation and not include Precious Metals and Commodities? This is totally asinine. Commodity bull markets go hand in hand with inflationary periods. Yes, Gold doesn’t always match inflation. It rises when inflation expectations rise and not when there is disinflation. And yes, clearly the author and most followers of mainstream publications fail to realize that excessive sovereign debt is a precursor to severe inflation. Bank lending, consumption, etc is not relevant in this environment of impending sovereign bankruptcy, zero percent interest rates and quantitative easing.
Moving along, the author makes the Altucher argument which perma-bulls constantly resort to. Who cares if there is inflation, buy stocks anyway! Ok, fine. But these stock pumping a-holes don’t even consider the right stocks. We know they will never recommend gold stocks. However, you can’t even get them to recommend energy stocks, agriculture stocks or any kind of miners. Instead, they will pick some big conglomerate with a minuscule dividend. Good for dis-inflation but worthless for the kind of inflation that is coming.
Finally, the author fails to even consider emerging market shares or debt, which, although seemingly riskier, will outperform over time. Those economies are growing faster and so to will fiscal improvement. Nevermind that some of these governments are far less indebted than the US, Europe, UK and Japan.
Retirees should at least get started by putting a little bit in Precious Metals, Commodities, and Emerging Markets. Hell, these things are actually in bull markets! What a concept. Do that and you can still feel comfortable with your grossly over-sized and wasteful position in US equities and bonds.
Full disclosure, yes I am talking my book. I write a gold newsletter and have been a commodity bull for a while and will be in the future. However, unlike most perma-bull stock pumpers, my book makes money! How about that. If you want real perspective on inflation and how to make a killing during what is coming, then consider a free 14-day trial to my premium service.