I doubt anyone here would accuse me of being evasive. The one thing I think many people in here are guilty of is paralysis of over analysis. Follow RE on a daily basis, when it’s values change over much larger time frames. Also, the dollar, inflation, the budget deficit, China, blah blah blah. How in the world can you ever make any investment decisions with conviction, when you are weighing that many variables at the same time.
Ironically, within this analysis, false inferences are often drawn to markets that do not even fundamentally correlate the way you are viewing them. For example, the budget deficit or the US DOllar have no strong correlation to stock market swings, so why would a report on one of them which is negative, and a subsequent market rally be surprising? They are not correlated fundmentally, so any relationship is essentially random. I know Fund Managers, and they do not sell stocks based on these goofy short term reports, only retail does ( the suckers ).
This issue of inflation and how to protect your assets is often discussed here. There is no perfect hedge in any situation, and this can be proven mathematically. As a result, you cannot put $100 dollars in a bank denominated in a foreign currency, and then borrow against it to buy Soy Milk at Trader Joes, because you think you might be net ahead after doing so due to a valuation play against the dollar.
My suggestion is to make the best investments you think you can and let inflation swings be what they will. Keep in mind if you do this, there will be periods of high and low inflation, where you will have head winds, and tail winds.
The people that assume an extended period of inflation that is longer in duration than what has historically occured, also are guilty of “it’s different this time” analysis which they often criticize with housing experts. Trying to predict the next 1929 is also an excercise in futility. Fight the trend year after year, hoping to finally be right the one time it cracks, is a good road to investment losses.
I have not considered inflation in an investment decision ever, and never will. Maybe I am just too damn stupid to figure it all out, but I need conviction in my decisions, and analyzing 25 or more components does not lead to conviction for me.
