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Inflation and rising interest rates - which industries will benefit


Gilp
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We've seen a long time of almost zero interest rates and low inflation.

There is a lot of talk recently about rising interest rates and inflation picking up, which historically make sense.

 

Which industries and specific companies will benefit?

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Real estate , bonds, and equities with economic moats tend to at least keep up with inflation - usually inflation + some real return.

As I said, inflation won't happen. When the talking heads on tv say inflation they don't actually mean inflation. They mean inflation pressures.... not the same thing.  But it does mean rising rates. So if lower rates help real estate prices.... then why won't higher rates hut real estate prices? To borrow a phrase... interest rates are like gravity.

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Usually the bonds are good if purchased at a reasonable rate, but let's say TIPS.

Real estate and good equities are long-term inflation protection, short-term people tend to have a knee-jerk reaction, selling when they are actually the only protection. But the problem is the purchase price. You have to eyeball what you think inflation might be, and have an initial yield and what you thinkt he growth of earnings will be to justify the price paid before the inflation hits.

 

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Usually the bonds are good if purchased at a reasonable rate, but let's say TIPS.

Real estate and good equities are long-term inflation protection, short-term people tend to have a knee-jerk reaction, selling when they are actually the only protection. But the problem is the purchase price. You have to eyeball what you think inflation might be, and have an initial yield and what you thinkt he growth of earnings will be to justify the price paid before the inflation hits.

 

Yep.

 

http://www.arborinvestmentplanner.com/quotes-the-most-important-thing-howard-marks/

 

Pick a quote, any quote...

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