The way to make a profit against inflation is to invest in a wide range of commodity products.
Typical losers:
- Savers and savers
- Retirees living on a fixed income
- Variable variable interest rate borrowers
- Exporter
--Uncertainty in the global economy
- In an inflationary environment, traditional savers are clearly losers.
As prices continue to rise, the purchase value of money falls, and so does the real value of savings. Some might argue that savers are beneficiaries of rising interest rates on deposits, but this could have a serious time lag.
Borrowers on variable variable rate mortgages or personal loans will see higher interest rates, which will have a negative impact on cash flow.
Exporters will also lose — as commodity prices become more expensive than other countries, it will lose competitiveness in macro-global demand.
The way to make a profit against inflation is to invest in a wide range of commodity products.
Since commodities are the basic resource required for most production, commodity prices are strongly correlated with inflation.
An example of this type of ETF is the iPath Bloomberg Commodity Index ETN (stock code: “DJP”) issued by Barclays Capital. $iPath Bloomberg Commodity Index Total Return ETN(DJP.US$
The ETF provides investors with good exposure to a wide range of basic commodities, including energy resources, precious metals, and agriculture. You can see that some of their top 15 include gas, soy, aluminum, copper, corn, wheat, sugar, and coffee.
This ETF has a fee rate of 0.7%, making it competitive compared to similar ETFs.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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