Investment Basics

I have to laugh when the government comes out with its core inflation numbers. When you look at those numbers you get the picture that things are just cruising along nicely. Nope, no price increases here. But when you look at the things that aren't included, like food and energy, you get a much different picture. We are paying more for things we most need. Regardless of what the Fed or government says, this trend is going to continue. As such, I highly recommend looking into ways to use inflation in your favor.

I am a big subscriber at looking at pain points for investments. As such, it is easy to see that food and energy costs, among other things, are going up. Since these areas are going to be a real pain in the behind, it would be a good idea to invest in them. Another simple thing you can do to hedge against future increases in food costs is to buy more of it today. Obviously this goes for non perishable food goods. This way you can take advantage of today's cheaper price tomorrow. Obviously, energy costs are a little harder to hedge in this way. Since energy prices will be rising, the energy sector is a good place to park some cash. You can also invest in weather proofing your home. This is a real bang for the buck activity.

Gold and silver are definitely two great inflationary investments. I'll let the 1970s speak for themselves. Today we find ourselves faced with a similar situation, but our debt increase provides much less wiggle room. I think that will provide a lot of currency pressure that wasn't seen in the 1970s. In any case, the price of gold went over $800 in the 1970s. Based on inflation alone, gold should be higher today. And now that Bernanke and the Fed are printing money like it's going out of style, I find no reason for those prices to go much higher. It is interesting to note that silver always lags behind gold. It lags, yes, but it runs much longer and much higher than gold. By higher I mean in terms of percentages.

Another interesting area for inflationary investment is in bonds, interest rates, and debt. I'm not going to go into all the ins and outs of systemic market dynamics. But I think it's a fair assessment that rates will go much higher in the next decade. Obviously, on the consumer market side, the best play for you would be to lock in a super low rate. This way your debt will take less to service. You can also buy funds that bet against US treasuries. This way you can take advantage of the crazy monetary policy in place. And finally, it should be noted that, if played right, that debt becomes much cheaper to pay off at a later date. Inflation haven investments retain your wealth. As those dollars lose value, things like a locked mortgage rate home payment remain the same. In this way, as your investments take off, you can later pay down or pay off things like a home. It's a good strategy.

Paul has been writing informative articles like this for 6 years. Come and take a look at his newest site which discusses a jogging double stroller and general information about a double stroller to help users make an informed choice about them.