 |
| Inflation-and-Bitcoin-Mortgage-Stocks-Gold |
Good Eye Fellow Investors It’s Likely Even If Nobody Thinks About That That There Will Be Higher And Higher Inflation Bitcoin, Mortgage, Stocks, Gold In The Coming Years And Decades Because Governments Are Going To Print More And More Money And
We Have Discussed In The Last News How Even If We Don’t See It That Much Inflation In Certain Places From Financial Assets From Healthcare From Education There Is A Lot Of Inflation And Much More Than We Would Like So Inflation Is
A Certainty In Life Governments Have The Goal To Have An Inflation Rate From Two To Four Percent So It Makes Easier For Them To Repay That Future Obligations Are Much Easier And It Stimulates Spending As If You Know That Your Money Is Going To Lose Value You Are Stimulated To Spend It And Invest It
So That’s The Theory But Let’s Now See How Can We Take Advantage Of The Theory Or At Least Protect Ourselves From That What’s Going On And Will Inevitably Hit Us If You Look At Inflation It Has Been Low Over The Past Ten Years Especially But Historically Inflation Bitcoin, Mortgage, Stocks, Gold Down
There Are Periods With Low Inflation Periods With High Inflation And Be Careful Not To Get Caught In High Inflation Unprepared Something Very Interesting From An Article Written By Professor Emeritus Edward Acquirer From The Santa Clara University Is The Difference In Stock Market Returns With And Without Inflation So We Have.
The Blue Line Which Is The Normal Stock Market Return Since 1927 And Then The Red Line Which Is Adjusted For Inflation 10,000 Investment In Stocks At The Peak Of The 1920s Bull Market Would Have Amounted To 9.3 Million In 2009 However If We Omit Inflation Benefits
And Reinvested Dividends The Return Would Be Just 33,000 Without Inflation And Dividends The Compounded Investing Return Declines From 9 Percent To 1.5 Percent, Per Year As The Nine In the 20s Ever age Dividend Yield Has Been Around 4% 3.5% Per Year In Returns Is Thanks To Inflation Therefore Just Because We Are In
A Period Of Low Inflation Bitcoin, Mortgage, Stocks, Gold It Doesn’t Mean We Don’t Have To Think About Inflation Especially As Monetary Policies Are Tending Towards Monetary Policy Free Or Modern Monetary Policy This Chart Shows It Even Better If We Look At The Impact Of Inflation From 1929 To 2009
It Is Staggering Inflation-Adjusted Scp-500 Returns Are Much Lower If We Look At Inflation So The Sp500 Inflation Adjusted Would Be At 445 Points In 1929 And Then 885 Points In 2009 So Over 80 Years, The AP Has Just Had Just Doubled At The Bottom Of The Crisis Now It’s Much Better But We Are At The Top Of The Market It Has Quadrupled Even Inflation Bitcoin, Mortgage, Stocks, Gold Adjusted Over.
The Last What 10 Years So We Might Expect Not So Positive Returns Inflation-Adjusted Returns In The Futures On Dividends Yes Some Say On Top Inflation You Have Dividends Those Were On Average 4 Percent Over The Last 150 Years However Now Those Are Much Lower So Not Even The Dividend Yield Will Compensate For
What Might Happen From Stocks Given That Inflation Is Inevitable At Least I Think So And We Have To Prepare For It, We Will Discuss How The Reason Flash And The Government Just Doesn’t Tell You The Dangers Of Inflation Bitcoin, Mortgage, Stocks, GoldHow To Invest With Inflation Bitcoin, Mortgage, Stocks, gold and Litter Current Tricks
For Long-Term Gains On Inflation In The Last Stock Market News I Borrowed A Nice Chart From Peter Barking Showing How There Has Been Some Significant Inflation Over The Last Year’s Especially In Hospital Services College Tuitions Textbooks Childcare Medicare Etc And Not That Much In Toys Televisions Computer Software
And All Those Market Free Things And Giving That There Is More Debt There Will Be More Inflation So Let’s See What Are The Dangers Of Inflation, The Dangers Of Inflation Are That It Spikes Fastly
That There Is Usually Inflation Bitcoin, Mortgage, Stocks, Gold Is Not Linear So It’s Low And Then It Spikes When That Happens Businesses Cannot Transfer Price Increases To Can’t Customers That Fast And A Lot Of Businesses Might Get In Trouble
And Then You Have Stagflation Then The Government’s Run Seen To Print More Money To Cover For The Deficits The Debt And Then You Have A Spiral That Might Or Might Not Happen But It Is A Big Risk If We Look At Inflation And Compare It
To The Five-Year Treasury Yield We See That Over The Last 10-15 Years The Fact The Actual Real Return On The Five-Year Treasury Has Been Zero Or Even Negative When The Inflation Rate Was Above The Yield So We Have A Very Interesting Situation With Low Inflation And Low Yields The Best Way To Think About Long Term Inflationary Protection Because
It’s Unlikely That This Will Go Lower For Longer-Term Especially If More Money Is Printed I’m Just Going To Give You Three Simple Steps That Anybody Can Do To Protect Themselves Over The Long Term From Inflation Bitcoin, Mortgage, Stocks, Gold If Currencies Are Going To Lose Value One Way
Is A Mortgage With A Fixed Interest Rate You Are Practically Short Currencies When You Have A Mortgage Because of You Get Your Money Now You Buy Something Like A House We Should Appreciate For Inflation Bitcoin, Mortgage, Stocks, Gold, And Your Payments Are Equal For The Next 30 Years So If
The Dollar Loses 56 Percent In Value Over The Last 20 Years If That Happens Again Then Your Payment After 20 Years Will Be 50 Percent Lower Than Now In Real Terms Plus If You’re Renting Your Rent Will Go Up Alongside Inflation But Your Fixed Mortgage Payment Will Stay Fixed So Though
This Is One Of Those Decisions In Life You Make It Once You Change Houses But When You Have Such A Thing You Are Practically Diversified Because You Are Short The Currency The Second Thing Is Okay Avoid Bonds Long Term Especially Now Because If You Look At The Long-Term Interest Yield On The 30-Year Treasury Okay It Might Go Lower
That’s Always A Speculation But Given The High Debt It Might Also Go Much Higher Especially If We See Inflation Bitcoin, Mortgage, Stocks, Gold And Then There Would Be Really A Big Loss Of Value Like It Was The Case For Bonds Up To The 1980s And Then Number Three Don’t Get Fooled
By Non-Productive Business Assets Like Gold Other Precious Metals Or Crypto currencies That Must Be Part Of A Special Strategy If You’re Going Into But It’s Better To Have Productive Assets Over The Long Term Because You Get Dividends Earnings Growth And Everything
Which Is The Things You Don’t Get In Gold Plus If You Invest In Gold Or You Hold Gold You Have To Be A Speculator And Rebalance Constantly Depending On What The Market Tells You Which Is Something Few Can Do At Least I Prefer Investing To Speculate If We Look At Inflation Adjusted Gold Prices On A Log Scale,
In This Case, You Can See Huge Volatility But Not That Much Real Value Creation And There Have Been Decades Where The Price Of Gold Would Just Go Down And Down Despite Inflation So The Key Here Is Okay If You Hold Gold You
Have To Buy It When Nobody Wants It And Sell It When Everybody’s Crazy About It It Involves Timing Market Timing You Might Do The Wrong Thing At The Wrong Time You Might Time It Nothing So You Might Get Bored After Five Years
And This Is Something You Have To Keep In Mind For Investing In Such Let’s Say Inflation Protective Assets That Don’t Have A Yield On The Contrary If We Look At Productive Assets Berkshire Hathaway Chart From The 1980s This Is Always
The Best Production If You Have A Great Business If You Allocate Capital Smartly And You Buy The Bargains Out There The Investment Bargains This Is I Really Think To Being Aggressive Going For The High Returns Low Risk Because There Are Many margins Of Safety But High Volatility Because It’s The Stock Market I Think
It Is The Best Protection Over The Long Term So Conclusion Don’t Invest In Currencies Be Careful Of Fixed Yielding Long-Term Assets Those Could Really Kill You If We Have Two Years Of Inflation At 8% Invest In Businesses And Be Careful On The Non-Producing Assets And Look For A Mortgage And See How It Fits Your Personal Long-Term Finances And Your Lifestyle Thank You.