By David Schassler, Portfolio Manager and Head of Portfolio and Quantitative Investment Solutions, VanEck
Many market observers believed that we would not have high inflation and that any inflationary forces would be mild. This was not correct. As of May 31, 2021, the year-over-year inflation change was 5%, based on the Consumer Price Index.
We believe it is time for investors to start taking the risk of an extended period of high inflation seriously by adjusting portfolio exposures into assets that protect against inflation. In this white paper, we seek to help investors navigate this investment climate. Topics include:
- How the current market compares to the inflation in the U.S. in the 1970s and mid-2000s
- Performance of real assets (commodities and gold) during prior inflation regimes
- Inflation and the prices of commodities and natural resource equities today
- Impact of bitcoin as “digital gold”, and another store of value asset available to retail investors
- How investors can size a portfolio allocation for inflation protection
1 Source: Bloomberg. Data as of 6/10/2021.Please note that VanEck may offer investments products that invest in the asset class(es) or industries included herein.
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
S&P 500 Index is a free-float weighted measurement stock market index of 500 of the largest companies listed on stock exchanges in the U.S.
The S&P 500® Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Van Eck Associates Corporation. Copyright © 2021 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spdji.com. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.
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