Are we heading for inflation? What about deflation? Are you unsure? A lot of people are so it is becoming difficult to know where to put your money. In an environment like this I believe that you should consider alternative investments. No one can be sure of what is to come but we can do our best to prepare for it.
I too, like everyone else, am uncertain. If I were pushed to give an answer I think that we will see inflation after a short time of deflation. What does this mean for investing? In a period of deflation then cash becomes a good bet. We have seen that in Japan where they have been struggling with deflation for years.
So given that we might see deflation does that mean that alternative investments are unwise? Not necessarily. The reason for that is the Fed is printing money like nobody’s business. Just because this isn’t having an impact on the ‘real’ economy it doesn’t mean that it doesn’t exist. This money has to be channelled into something in search of a return. It might just find its way into alternative investments.
Although there are two camps of thought on the inflation/deflation issue, the majority of people have the belief that it will be inflation. In a scenario like this alternative investments tend to do quite well.
Values in alternative investments, such as wine and antiques, aren’t very correlated to fluctuations in the stock market. This allows you to diversify more and given that a lot of people have a lot of wealth tied up in equities this is not necessarily a bad thing.
Not being able to know what will happen can be quite unsettling. This means that you have to do your best to protect yourself if the worst does happen. Having exposure to alternative investments will help you with that.
Are you keen to find out more information on alternative investments strategies? If yes then you can discover more by going to Dave’s blog. It has all benefits and negatives of making alternative investments.