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inflation protection portfolio



6/3/2009
Many people are looking for inflation protection and are rightly worried about what will happen to the U.S. dollar thanks to all the new money printing that has been taking place to bail out companies and banking institutions. This is why I made this article; this article is designed to the best of my ability for those who want to play the market “safe” against inflation, and those who don’t want to lose what they already have i.e. inflation protection. I have put together a small investment vehicle here that I personally think in inflation will remain relatively safe no matter what the dollar does in the near future. I explain my reasoning behind each one of the investments shown so you know that I am thinking and you can form your own opinion on the investment before you put your money in it if you want too.

-GLD Gold Shares 33% portfolio weight

For many people buying gold simply isn’t a good option because they may not have enough money, or they simply don’t want to have to worry about keeping large amounts of gold in a safe place. As a solution to their problem I think that SPDR gold shares are a great solution. These shares mirror the price and demand for gold. As gold goes up as the shares seek the performance of gold because it is actually a gold trust. I wouldn’t weigh a lot of your portfolio in gold but if you are worried about inflation defiantly buy some of these shares i.e. 33% of the weight of your portfolio should be enough for inflation protection with gold.

-NWE Northwestern Energy 33% portfolio weight

Yes well not only are they an energy company that can pay a lot as a dividend, they also have the ability to charge more if the dollar goes bad and since they have no competition and people need energy why do you think they would go out of business?

-UCO Crude oil pro shares 33%

Of course I think that oil will go up anyway, but like any commodity it’s going to go up more if the dollar starts crashing. This fund seeks twice the daily performance of oil in the market; in other words if oil goes up it’s supposed to go up a lot more in value then just the rising price of oil. With oil in as much demand as it is these days I don't see how you can lose if you hold this investment for the long term.

practical stock investing - for a devalued dollar

-Conclusion
When you think about it there are actually a lot of investments out there that can be used to do the opposite of inflation. I think that some inflation is going to happen and that it would be a wise idea to start a little “side portfolio” where you stash a away at least a little bit of your money in the investments talked about above, or other similar investments that you might have thought of that can actually beat inflation and potentially make you a nice profit. Think of this "side portfolio" as a hedge against inflation so that just in case things go bad with the dollar you will have something to back you up.

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asset types for inflation protection and other things