Originally Posted by ferco
Brewer, what asset allocation would YOU structure in that environment? Would you be more conservative or aggressive?
I'm most of the way there already. 8% PCRDX, 8% GIM, 8% ISM, 7% EFA and the rest is individual equities. The indvidual equities are concentrated in companies that own or control tangible assets (EGLE, STON) or produce commodities, or are non-market sensitive fnancials (catastrophe reinsurers, conservatively run retail banks). I don't hold a lot of cash and I would cash in my CDs if rates spiked. I am also modeatly leveraged with fixed rate debt (mortgage, car loan, student loans) all at below market rates.
If inflation gets away from the Fed, it won't be lots of fun, but I will be in reasonable shape. I think that if you are sticking with funds, just make sure you have a substantial amount of non-US stock and bond exposure and some commodities and you'll be OK. Oh, and don't go too far out with bond maturities (unless they are floating rate).
But then again, the Fed may succeed in paper-cutting inflation to death and the economy may actually slow back down to sustainable growth.