Hi all
We recently bought a place last year and fixed 90% of the mortgage at 1.98% for 3 years. Given pending inflationary and possibly stagflationary risks, what is your advice for hedging against these rising costs?
We have already bought place so that is a hedge - but what about REITs, equities or other inflation-linked bonds? All I know is that the longer my money is sitting in the bank, the less it could be worth…
Advice and thoughts welcome and please be kind!
Crypto is a big no no on these forums. Unfortunately. I bought some property and keep excess cash in USDC at 7-9%.
I BTFD.
It's the only thing that works.
but what about REITs, equities or other inflation-linked bonds?
📉 😆
Gold and Silver.
If you're renting out your house then I'd think about hedging against property. WWIII could break out and it's probably not a good idea to bet for certain on rents going up for the next ten years.
We have already bought place so that is a hedge
Not really. Only a hedge if interest rates stay at 0% and inflation is 2% - 3%.
The reason why if interest rates rise, then house prices (should) go down.
Discounted cash flow (DCF). Say if you are saying $15k a year renting in perpetuity, the discount cash flow using rate at 1.98% would be higher present value than if rates are at 3%. But it is a hedge against rising rents provided rents where you want to live are inelastic.
But then we know the general public and math
but what about
Generally only 2 types of businesses which are monopolies (example rail companies) and those with large moats (Coca Cola). That is why Buffet bought Burlington Northern Santa Fe and Coca Cola (you can't replicate these products / business models easily) they can raise prices easily.
To some extent Woolworths and Coles are duopolies and they make their cut regardless.
Get a higher paying job XD
A higher paying job doesn't negate inflation. It compounds the effect of inflation.
Buy everything you need ASAP.
Not only will things get more expensive, the quality also goes down. I've got some "cheap" furniture purchased around the 2008-2010 era (think, DIY assembly shelves, etc) and they are 10x the thickness/sturdiness of what is now on offer. You may not be able to buy "everything", but if it's something you were considering and may need, do it now is good advice.
my shrubbery is against inflation as well
Follow the herd, hedge against inflation with crypto, but unlike the herd, HODL ;)
The traditional methods are also a good hedge (land and comodities)
not financial advice