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5 WAYS TO PROTECT YOURSELF FROM DEFLATION

19 August 2009 by TPC 7 Comments

David Rosenberg provides us with this excellent table that shows us 5 ways to protect a portfolio from a deflationary environment, which has been evident in recent data:

Source: Gluskin Sheff

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7 Comments »

Naa said:

Why isn’t Cash on that list??

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# 19 August 2009 at 10:01 AM

Vermonster said:

Try reading point one again. Safe Yield = cash

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# 19 August 2009 at 10:22 AM

hbl said:

For some reason Rosenberg has stopped suggesting treasuries, though he was regularly doing so up until a month or two ago, so I’m not sure why he might have changed his opinion in this time period. Yes it’s also strange cash wasn’t on the list, unless he just assumed that was too obvious.

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# 19 August 2009 at 10:37 AM

TPC (author) said:

I would take “safe yield” to include cash & treasuries. He is no doubt bullish on t-bonds. It’s odd that he isn’t a bit more specific.

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# 19 August 2009 at 10:47 AM

JTodd said:

TPC,

If you were going to invest in treasuries right now would you be buying the short or long end of the yield curve? What do you think is the biggest threat to the down side with treasuries right now? Inflation? Continued market rally?

Thanks!

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# 20 August 2009 at 6:40 AM

TPC (author) said:

I like treasuries here. No concerns over inflation from me.

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# 20 August 2009 at 6:51 AM

JTodd said:

So do you like sort dated or long dated treasuries here?

The long dated treasuries (TLT) are tempting as they pay around 4% and are down around 25% from their highs but how high is the risk? Should I just stick with the short dated treasuries?