Preparing For Inflation
We focus quite a bit in this country on the amount of money the government is printing to artificially stimulate and support our economy.
This is a potentially devastating practice, and one that will soon trigger rising inflation. Undoubtedly, Europe will also have to engage in the same kind of artificial money creation to prop up its sluggish economy.
Investors should be forewarned that rising inflation will affect their cost of living and erode the value of their portfolios. With so much excess money sloshing around, I believe we will see dramatic inflationary and cost-of-living spikes in 2012.
To counter this, savvy investors should own stocks, not bonds. Bonds will be particularly vulnerable in a rising interest rate environment. I would suggest that investors focus on commodity and energy-related stocks. Two of my favorites in these categories are Market Vectors Agribusiness and iShares Dow Jones U.S. Energy.
Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry for over 22 years. Check out Ed’s discussion topics for a quick tip or two for your own financial well-being in his Media Center or follow Ed Butowsky on Facebook.