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Any ideas on how to play stagflation, besides the most obvious?
I'm thinking at this point, stagflation is much more a risk than a double-dip.
Seems like the obvious ways to play this are: large-cap international stocks, energy stocks, commodities and -- if necessary to have income -- short duration bonds or international bonds. Perhaps a smattering too, to high quality dividend-paying stocks.
I continue to go with wide diversity of strategy and asset classes - everything from investments (including one fund that is invested in a palace) listed on foreign markets to commodities, EM stocks, real asset investments (Brookfield Infrastructure, Sprott Resource), EM funds (including Pimco EM Multi-Asset), developed market funds, etc. etc. I even have a global timberland fund, which has done poorly, but picked it up trading at a pretty decent discount to NAV in the hopes that the value of the timberland (water rights, as well, etc) in multiple countries will be realized.
The main sales have been Pimco Unconstrained and a portion of Pimco All Asset/All Authority. I don't think All Asset/All Authority is a bad fund, but simply moved to what I thought was a better opportunity elsewhere. I am actually disappointed in Pimco Unconstrained and will be selling that entirely.
Cambium Global Timberland (http://www.cambiumfunds.com/). The US pink sheet version is CMBXF (the original issue trades on the London market.) There is no ag land ETF, but some land investments within other investments, such as the Soros-backed Adecoagro (AGRO) or the farm and foreign ag investments in Sprott Resource.
I think you folks are all on track. The most likely future is one of austerity which thanks to ExEditor, is stagflation with NO growth. aaarrgggh.
Diversified. Divididends. Commodities sure, but real stuff that will hold its value while they devalue all fiat currencies. Int'l including emerging mkts. Corporate bonds. Some TIPs for giggles.
Actually, this should be a great time for the PRPFXs of the world..
I believe stagnation and inflation cannot last for too long... One or the other has to give up.
If it is a slowing economy, commodity demand will slow. For example, our fuel consumption will slow. Also, our ability to import foreign goods will diminish which in turn effect the countries that export to US such as China. Their consumption of commodities will slow. Thus bringing down the inflation.
Finally, the cure for high commodity prices is higher commodity prices which basically such more and more discretionary spending to the point that main street businesses cannot go on and commodity demand collapses.
In other words, these inflation and growth cannot be out of sync for too long.
Comments
The main sales have been Pimco Unconstrained and a portion of Pimco All Asset/All Authority. I don't think All Asset/All Authority is a bad fund, but simply moved to what I thought was a better opportunity elsewhere. I am actually disappointed in Pimco Unconstrained and will be selling that entirely.
Was actually looking to see if there was an ag. land ETF or fund.
Diversified. Divididends. Commodities sure, but real stuff that will hold its value while they devalue all fiat currencies. Int'l including emerging mkts. Corporate bonds. Some TIPs for giggles.
Actually, this should be a great time for the PRPFXs of the world..
peace,
rono
If it is a slowing economy, commodity demand will slow. For example, our fuel consumption will slow. Also, our ability to import foreign goods will diminish which in turn effect the countries that export to US such as China. Their consumption of commodities will slow. Thus bringing down the inflation.
Finally, the cure for high commodity prices is higher commodity prices which basically such more and more discretionary spending to the point that main street businesses cannot go on and commodity demand collapses.
In other words, these inflation and growth cannot be out of sync for too long.