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5 WAYS TO PROTECT YOURSELF FROM DEFLATION

19 August 2009 by Cullen Roche 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:

defpro

Source:  Gluskin Sheff

Cullen Roche

Cullen Roche

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Comments
  • Naa

    Why isn’t Cash on that list??

    08/19/2009 at 10:01 AM
  • Vermonster

    Try reading point one again. Safe Yield = cash

    08/19/2009 at 10:22 AM
  • hbl

    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.

    08/19/2009 at 10:37 AM
  • Cullen Roche TPC

    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.

    08/19/2009 at 10:47 AM
  • JTodd

    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!

    08/20/2009 at 6:40 AM
  • Cullen Roche TPC

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

    08/20/2009 at 6:51 AM
  • JTodd

    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?

    08/20/2009 at 7:09 AM