music-and-ski
Recycles dryer sheets
I knew inflation was coming.
I read expert opinion that said real-estate is a good inflation-proof investment, because the rent from the real-estate inflates. But, I knew that wasn't really true, because I knew that when interest rates rose alongside inflation people wouldn't be able to afford housing unless housing prices dropped. It would have been better to sell the homes, and buy them back after rates went up and prices go down.
Of course holding bonds is dumb if you think interest rates are going to rise alongside inflation, their value drops when interest rates go up, and their coupons don't track inflation like real-estate rents might.
I thought that holding onto shares in companies that produce valuable products (especially consumables) would be good, because people will still need those products, and the revenue stream of those products would go up with inflation. But, all my stocks in producing companies have gone down too, I guess because of general fear and/or the yield rate has to go up (hence value down) to relate to the new interest rates.
I heard that having a lot of debt is good in an inflationary world, since it gets inflated away. I do have some mortgages.
In a general sense, with hindsight, what would have been a good set of assets to hold at the beginning of 2022? I mean aside from cash, which is dangerous to hold because it just inflates away in a high inflationary environment. I did cash-out on a couple of good investments near the peak, but I used the money to reduce my debt. Should I have kept the debt, to let it inflate downwards over time, and put that money into something else?
I tried to do the research in advance of the crash, knowing that inflation and interest rates were going up. But, with hindsight, do we know anything that would have worked? Hindsight is 20/20, but what do we see? I don't see anything that would have been wise, aside from cashing everything out, and hoping you can get back in at a lower price before inflation eats away all that cash.
I read expert opinion that said real-estate is a good inflation-proof investment, because the rent from the real-estate inflates. But, I knew that wasn't really true, because I knew that when interest rates rose alongside inflation people wouldn't be able to afford housing unless housing prices dropped. It would have been better to sell the homes, and buy them back after rates went up and prices go down.
Of course holding bonds is dumb if you think interest rates are going to rise alongside inflation, their value drops when interest rates go up, and their coupons don't track inflation like real-estate rents might.
I thought that holding onto shares in companies that produce valuable products (especially consumables) would be good, because people will still need those products, and the revenue stream of those products would go up with inflation. But, all my stocks in producing companies have gone down too, I guess because of general fear and/or the yield rate has to go up (hence value down) to relate to the new interest rates.
I heard that having a lot of debt is good in an inflationary world, since it gets inflated away. I do have some mortgages.
In a general sense, with hindsight, what would have been a good set of assets to hold at the beginning of 2022? I mean aside from cash, which is dangerous to hold because it just inflates away in a high inflationary environment. I did cash-out on a couple of good investments near the peak, but I used the money to reduce my debt. Should I have kept the debt, to let it inflate downwards over time, and put that money into something else?
I tried to do the research in advance of the crash, knowing that inflation and interest rates were going up. But, with hindsight, do we know anything that would have worked? Hindsight is 20/20, but what do we see? I don't see anything that would have been wise, aside from cashing everything out, and hoping you can get back in at a lower price before inflation eats away all that cash.
