• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

US investors what are you doing to protect yourself from inflation?

pete6032

pete6032

Diamond Member
Inflation is 6.8% right now and my savings account is paying less than 1%. Need to keep some funds liquid of course but I'm not ready to jump into the stock market. Are you guys buying CDs, treasury securities, what?
 
i bonds from treasury direct is all i've got. you can only buy 10$k a year, but i've been moving some of my savings account to them over the years so i have a decent amount.

other than that i just use intermediate term bonds and know they'll probably take a slight hit. but if there's a crash, at least they won't drop %30-50 like stocks.

oh, and a little bit of gold.
 
I've given up investing in treasury bonds. With the yields as low as they are, you're basically losing money to inflation by holding onto them.

I'm still holding onto some higher yield corporate bonds, though. S&P 500 Index funds have become my default investment when I can't figure out where to put it otherwise, though. It seems that most mutual funds struggle to beat the S&P 500, so you might as well just own the benchmark instead of try to beat it.
 
Last edited:
Long term goal to live off grid which will eliminate pretty much all costs of living which keep going up each year, leaving me with less and less disposable income each year. The tricky bit is finding a source of income though but whatever that source is, it won't have to be as much as my current job, so the money is going to go much further. Then I can actually do proper investing.

My current investments are fairly paltry as I don't have much money left over to put towards it.
 
With inflation at 6+% and 15 year mortgage rates at below 3%, it seems the best way to protect your wealth is to go into debt up to your eyeballs 👀 and buy real estate or gold. No holding taxes for gold.
 
brianmanahan said:
i bonds from treasury direct is all i've got. you can only buy 10$k a year, but i've been moving some of my savings account to them over the years so i have a decent amount.

other than that i just use intermediate term bonds and know they'll probably take a slight hit. but if there's a crash, at least they won't drop %30-50 like stocks.

oh, and a little bit of gold.
Click to expand...
Ibonds could potentially be problematic in the OPs situation since liquid was mentioned and they have interest penalties until several (3?) years of holding.

Depending on the dollar amount I'd probably just move it around for some bank account opening bonuses. Those will pay more than a CD or savings account unless you have a lot of cash sitting around

Longer term nothing is going to have a better chance of out pacing inflation like the stock market. VTSAX was up 25.71% for 2021 and 25.77% year over year for the past 3 years so a tad more than inflation
 
Red Squirrel said:
Long term goal to live off grid which will eliminate pretty much all costs of living which keep going up each year, leaving me with less and less disposable income each year. The tricky bit is finding a source of income though but whatever that source is, it won't have to be as much as my current job, so the money is going to go much further. Then I can actually do proper investing.

My current investments are fairly paltry as I don't have much money left over to put towards it.
Click to expand...

Sounds like the Cheez investment strategy, although he might have taken it a bit too far 🙂
 
Hermes and gold.

lQiZ4dSh.jpg
 
IronWing said:
With inflation at 6+% and 15 year mortgage rates at below 3%, it seems the best way to protect your wealth is to go into debt up to your eyeballs 👀 and buy real estate or gold. No holding taxes for gold.
Click to expand...

30 year was below 3% for a while too … I got a no fees refi in six months ago at 2.875 and paying ~20% less monthly than I was when I bought this place two years ago. My fiancee and I are going to buy our country / “retirement” home in the mountains up north soon as well. Most people wait until they’re 50-60 but we want to enjoy it for the rest of our 20s and 30s too.

Other than that we’re keeping it simple with around $50k in no/bullshit interest bank accounts and the rest in stock market index funds. No real need to over-optimize beyond that. At some point, we started to be lucky enough to have “enough” and it doesn’t add anything to our lives to try to get bigger numbers in a fidelity account somewhere. Strategy will have to shift of course as we get older but it works for now.
 
Exterous said:
Ibonds could potentially be problematic in the OPs situation since liquid was mentioned and they have interest penalties until several (3?) years of holding.

Depending on the dollar amount I'd probably just move it around for some bank account opening bonuses. Those will pay more than a CD or savings account unless you have a lot of cash sitting around

Longer term nothing is going to have a better chance of out pacing inflation like the stock market. VTSAX was up 25.71% for 2021 and 25.77% year over year for the past 3 years so a tad more than inflation
Click to expand...

yeah, OP, just open a brokerage account and put it in VTSAX. It will always beat those laughable savings accounts and it's as liquid as you need it to be (well, what is it, maybe 2-3 days from selling shares and transferring funds between banks?), very similar to a savings account.

The value will move a lot of course, but it's still very stable compared to individual stocks, and if you ignore the wildish swings with the market, up 30%, down15%, up 3%, it will still always be worth more than your ~0.1% savings account.
 
Exterous said:
Heh - I'm assuming joking but just in case anyone is considering that - more than decent chance Erdogan does some sketchy shit with their economy which can tank your investment
Click to expand...
Currency risk is huge and can wipe out any interest rate gains. Unless you live in Turkey, you have to convert the lira back to dollar, Euro, or whatever your native currency. That's the huge risk on top of Erdogan doing something stupid. We are truly blessed here in the United States that the world uses the dollar as the reserve currency.
 
ultimatebob said:
Sounds like the Cheez investment strategy, although he might have taken it a bit too far 🙂
Click to expand...

Pretty much, except I will actually own the land and probably build something bigger, and actually insulated. 😛 I don't know how he does it without much of anything for basics like running water or heat etc. I plan to still have all that stuff.
 
There's no need to make changes for some transient inflation. If you hold mostly equities, remember that companies can raise prices faster than you can meet them. Sure, if you're in a sector with a very elastic demand curve (very sensitive to changes in price) then you might have to make a judgement call about doing it at all and if so, where's the sweet spot such that you can increase prices but only so much that it doesn't hurt your profitability.

If you mainly own debt instruments, then at the very least try to set up a bond ladder. You'll still have capital losses but as each bond gets very close to redemption, it will (should) approach it's face value and since those capital losses were all paper rather than real, you should be OK. Bottom line though, if you think interest rates are going to go up in the longer term, you should really try to avoid bonds.

The one exception I can think of is junk bonds. These are valued mainly in relation to their stock price. So they trade more like equities than debt.

Right now I have about 3/4 of my money in stock with the rest in debt mutual funds or ETFs. But my stocks are mix between mutual funds (<1% in TOTAL admin fees). and I've been gradually dumping the individual shares.
 
Stock market is in a huge bubble right now though. There's no knowing how long it will stay like that. Stock market can indeed be high return but it's also high risk. I mean, sure the price of silver/gold could maybe tank too but I think the odds of that are smaller as there is a real cost to mine/process it.

Not linking to image directly since there's swearing and don't think that's allowed, but thread here:

https://www.reddit.com/r/Wallstreetsilver/comments/ug7fvm

Ok, so that still shows the image anyway... oh well lol.
 
You must log in or register to reply here.

TRENDING THREADS

Back
Top