“The emerging markets are still growing robustly, and that’ll fuel demand for products here,” she says. “So while the threat of inflation is not necessarily high here, investors should still prepare for what could be a scenario where we’ve got slow growth but higher prices.”
The Case for TIPS
Commodities , particularly gold and energy stocks, have long been viewed as traditional inflation hedges, since they tend to outperform in an inflationary cycle.
And, indeed, both have given rock-star performances over the last few years, but they can also be volatile.
As such, Anthony Webb, research economist for the Center for Retirement Research in Boston, says they are ill-suited for retirees.
Those in the decumulation phase of their retirement planning , he says, should consider other tools to insulate their income against the threat of inflation.
Among them: TIPS
Though their yields are currently flirting with all-time lows, Treasury Inflation-Protected Securitieshave been hugely popular among retirees since the economic downturn began—due largely to the flight toward safe-haven securities.Page 2 of 7 | Prev Page | Next Page