Tuesday, May 26, 2009

Inflation Hedge

The following is a list of stocks/ETFs for inflation hedge:

TIP
GLD
SLV
TBT
DBA
DBC
...

TBT is probably the most aggressive way to profit from inflation. It directly shorts 20-year US treasuries. It is a double play for both inflation and weak dollar.

GLD (gold) is a good play, but its value is artificial as gold has little usage in industries. Higher inflation with stagnant growth may drive off the demand for jewelries as people have to spend limited budget on common goods and staples with higher price. I believe SLV (silver) is probably a better play.

The safest bet is probably Agricultural Products (DBA). But I would wait for a pull-back to below $25 to get into DBA.

DBC provides the broadest coverage of Commdities. It should have a place in everybody's portfolio as long as you are concerned about inflation down the road.

2 comments:

  1. Very informational. Thanks for sharing.

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  2. Unload all TBT today and wait for a pull-back. Fed will show some commitment to press the bond rate down in the near term.

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