Will the immediate investment horizon be dominated by inflation or deflation concerns? That is the critical investment question you must answer right now to continue building your wealth.
In this follow on post to last week’s update focusing on the exact same question I’m providing an additional resource here http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/07/13/debt-and-deflation.aspx
This article is a little heavy on economics for the untrained eye but is worth the time and effort. It makes very different points from last week’s resource, uses different data and analysis, yet comes to the same conclusion – the immediate concern is deflation despite everything you are reading in the popular press.
Again, I want to re-emphasize how important this question is to your investing. Very few people understand how to profit from deflation and that is why so many investors are losing money now. Don’t be one of the victims. Educate yourself and understand these issues. The popular press can mislead you. This is not “business as usual” investing”.
I believe ultimately the government can and will succeed in creating inflation – they have to as they are the greatest benefactor of this misdeed – but for now they are losing the war. Deflation is the odds on favorite for at least a little longer.
That means two things for your investment strategy: invest for deflation in the immediate time frame, and prepare and educate yourself for the transition back to inflation later on. That is what future posts in this series will do so please stay tuned.
BTW, for my regular readers you know that I’m on vacation this summer. This post comes to you from Chamonix, France. This morning we have a cold front moving through with heavy rains so I’m using the time to catch up on emails while the kids catch up on sleep. Yesterday’s hiking in the Alps was nothing short of breathtaking with a clear sunny day and perfect weather. The last two weeks in Paris were excellent with great exposure for the kids as we mixed museums and culture with Parisian parks and slices of nightlife. It has been a good trip so far.
I hope you are having a great summer as we watch deflation continue to develop while all around us the popular media is screaming inflation. These are very interesting times…
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