What if Stagflation becomes real and we repeat the 70s? What if we get 5-10 years of economic trouble?
Sure it is only a scenario, and sure, we can again see the money printers turned on and delaying the problem once again, but the probability of seeing some harsh times is increasing.
In such scenario we are probably better of with some diversification and not heavy on any specific item except some real $GOLD (physical or digital backed like $PAXG (+0.82%) or $GZUR or other) to hedge for eventual loss of value of money (and some $BTC (+0.6%) for those more willing to believe in it - on a side note, I am, but not financial advice).
Besides gold, a well rounded diversification with a mix of countries and more protective sectors and solid companies who do not require heavy end user consumer for survival might not be a bad idea. Also diversify in currencies, using not just USD but also EUR and CHF and whatelse fancys your likes, might offer some extra protection.
For diversification on the traditional sector:
- ETFs with world allocation and good diversified allocations, an higher allocation on the portfolio then the other items below - maybe $VWCE (+0.51%) or $ACWI , in addition to add more diversification one can also use $V3AA (+0.44%)
- ETFs with diversified allocation on energy - $WEEG (+0.76%) or other
- A small ammount of diversification also in emerging markets and other markets in complement to the above products, like for example $EIMI (-0.2%) and $WTIF
- Stocks for solid companies, not heavy consumer dependant and also sectors like health, public services and energy - for example $MSFT (+0.97%) or $WM (+1.04%) (but avoid others consumer dependant like the plague - example $META)
- Commodities and rare matterials like $COPPER, $OIL and $GAS if things do start to get bad will also probably be a good choice further down the road
Real estate direct investment will also have very good opportunities, the payback does take a long time though.
And you, what is your intake? Are we at risk of stagflation or do you believe things will just get better? What is or would be your strategy?
