Inflation hasn’t been much of an issue in recent years, but that’s to be expected during a recession. As we move further and further away from the Great Recession, the possibility of seeing increased inflation becomes more realistic. The changing political climate could also point to more inflation in the near future.
Towards the end of Barack Obama’s eight years in the Oval Office, unemployment was down to a healthy level and wages were on the rise, both signs of impending inflation. On top of that, Donald Trump has pledged to invest in infrastructure, renegotiate trade agreements, and lower taxes. All three could lead to increased inflation if they come to fruition.
One investment opportunity to consider if inflation does increase are treasury inflation-protected securities (TIPS). If there ends up being a high rate of inflation, TIPS could be a better investment than traditional bonds, especially as part of an IRA or other long-term investments.
It’s increasingly difficult to find American stocks that will be easy to buy low and sell high. Therefore, it may be time for people to start exploring other markets, particularly in Asia. For instance, Japan has more corporate governance and stricter accounting standards compared to the United States, which has helped to create more profitability in recent years. Japan also has a stable economy and one that should benefit from a healthier and more active world economy.
Meanwhile, India offers another Asian market with intriguing investment opportunities. India has an emerging market, which is another trend to watch in the immediate future. India’s economy is also somewhat immune to global trends, in large part because of the country’s massive population. Therefore, even if things turn south elsewhere, investments in India should be in good shape.
Healthcare looks to be a trendy investment until further notice. To be fair, if you are new to investing, then healthcare doesn’t necessarily represent the safest option, as it’s obviously become an important political issue in recent months. However, healthcare is undoubtedly at the forefront of our society, and more importantly, there are several areas for potential investment.
For instance, pharmaceutical companies are an option, as their innovative ideas for treating different diseases with new drug therapies offer plenty of potential. Biotech stocks also offer interesting investment opportunities because of the advances in technology. In terms of high-risk and high-reward, health care is always a trendy investment opportunity.
Last update: 23. January
BIG TECH AI DELUSION
The great delusion of Silicon Valley today is to bet on artificial intelligence and machine learning as replacing human minds, rather than merely aiding and enhancing them.
- - - George Gilder, Gilder's Daily Prophecy, January 19th, 2021