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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (44848)11/6/2005 7:49:47 PM
From: UncleBigs  Read Replies (2) of 110194
 
Russ, in your opinion, what is an optimal asset allocation for a portfolio designed to preserve capital but also preserve purchasing power?

T-bills and short-term treasuries are fine but they are still a negative real rate of return after taxes and offer no protection to a cratering dollar should Bernanke go crazy. Even I bonds are a negative after tax real rate of return.

It seems difficult to position a portfolio designed to grow at an after tax rate of return that exceeds inflation but that doesn't get crushed should deflation set in.

For example, energy and metals equities will do great in an inflationary environment but could suffer devastating losses in a deflationary environment.

Would be interested in your thoughts.
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