Inflation is to hit us big, and threatens our wealth! So, Inflation-Protection (Hedging) is key! Inflation is ‘in the making’ due to the Covid19 financial help programs by Central Banks and Governments to buffer an expected economic downturn. This time round, the Federal Reserve’s Program is larger than the last few programs taken together.
According to Alex Krainer, Hedge Fund Manager, Commodities Trader and advisor to Altana Wealth Management S.A.M. (Monaco), the best tools to protect from inflation are Commodity Futures and Farm Land. The worst investors can do is to invest in stocks, when inflation is a risk. Gold and other precious metals have always been the classic inflation hedge, but Commodities tend to perform even better, Alex is convinced. His book ‘Mastering Uncertainty in Commodities Trading – Generating sustainable Profits through Trend Following’, is a deep dive into investing in times of economic uncertainties.
Historical Data shows, that printing additional cash creates episodes of Hyper-Inflation and unless ‘re-absorbed’ fast by the Central Banks, private (paper) wealth goes ‘up in flames’ and loses its purchasing power. When (?) is inflation going to happen, is more difficult to answer.
One of the most important lessons in investing is: Don’t Trade – but invest! Don’t get ahead of yourself, thinking by jumping in and out of stocks you’ll turn a guaranteed profit. Plus, you have to be able to ‘stomach’ losses. Even the best strategy today, may turn out wrong in future, making you lose money. A risk management strategy is as important as your investment strategy. A solid risk management strategy prevents you from chasing your own tail and panicking when the markets turn against you.
His Key advise for Life: Invest – don’t trade. Think what you want to achieve. Make sure you turn that into a clear investment strategy, have a ‘cushion’ and a risk management strategy to buffer potential periods of losses and stick to your approach. Don’t panic and remember when you start trading (rather than investing) the odds are against you.
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More about Alex Krainer and Altana Wealth
https://www.altanawealth.com/
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