My answer is EFV. International value stocks with a reasonable yield.
Japan 26% came out of Covid more or less ok.
UK is hurting (18%)
Germany 11% (also came out ok so far)
Switzerland and Australia are also managing Covid fine.
Quick theory: US creates more money, US $ declines some but still we import more to maintain relative standard of living, Fed doesn’t raise rates, money is handed out to tied thing over, net effect= larger trade deficit, similar standard of living, and more debt managed at artificially low rates. Not enough “safe” assets to recycle the profits. Average person will think we muddled through but eventually this may cause some of the valuation gap to close with international value stocks. This can be a long (multi-year) process. In the meantime, we have some continuous scares in the US market, but the tech mega cap stay relatively highly valued as they can “absorb” excess funds created by central banks as they make products/services that people can’t live without. So long answer, yes it’s complicated but having real estate, mortgage debt at low rates, value stocks with some dividends and some mega tech will probably be ok. If you read “When Money Dies” deals with hyperinflation in Weimar Germany: 1. bondholders got killed, 2. stocks went up 3. real estate went up, 4. asset appreciation was used to pay off debt We may not get the full hyperinflation but a mild version already happened and we just didn’t see it. Normally we should have seen prices drop for all kinds of goods and services including real estate, but as so much aid/handouts/rescue money was put into the system the moment of deflation was erased before the statistics became official. So net effect, your cash is worth less than it would have been but as most don’t hold cash, it is a politically and economically non represented class. Shareholders, bondholders, real estate owners are those the Fed/congress cares out. I could go on.
