The last thing on anyones mind right now is the word "Inflation." While most people are sitting at home or work thinking about how low their 401k plan has gone, how likely they are to lose their job, or if they will be able to afford their mortgage payment next month, inflation is simmering getting ready to boil out of it's pot. Many experts who are rather respected in the field of economics are predicting that inflation could rise to levels not seen since the oil embargo of the 1970's. Because of the huge influx of money the world governments have injected into the system, we could face inflation rivaling the double digit numbers we saw 30-40 years ago. Although I don't think it will be quite that bad, there are steps one should take in order to protect their assets from inflation, and possibly make money in the process. Here are three quick ways invest your money to protect yourself if inflation does sky rocket.
In times of economic uncertainty and inflation, Gold is a sure bet. As inflation rises, the dollar weakens, thus taking more green backs to purchase an ounce of gold. Many experts think that Gold could go as high as $2000 an ounce within the next two years. Although I am not as bullish, I do feel that both inflation and the rebound in the economy will likely lead gold to new highs.
#2 Stock Funds that are Inverse Treasuries
I like both (RYJUX) and (TIP). (RYJUX) invests in instruments that have an inverse relationship to treasury prices. As inflation rises, treasuries drop in price, (RYJUX) will go in the opposite direction. (TIP) is an ETF that does almost the same thing.
#3 A Home
Now is the perfect time to buy a home, even without the threat of inflation. Mortage rates are at all time lows, and home prices have fallen through the floor over the last 2 years. As inflation rises, a homes value increases, and there is no better asset then one that you can use. With mortgage rates at 5%, and inflation possibly headed to double digits, a mortgage is the way to go even if you could afford a home with an all cash payment.
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