Secrets of Using Treasuries to Beat Inflation
Secrets of Using Treasuries to Beat Inflation: Inflation Protected Treasuries are a better hedge for inflation than equities are.
Key Takeaways
- Equity risk premiums are expected to be substantially lower than historical averages over the next 10 years according to Vanguard and JPMorgan forecasts
- Don't assume equities will automatically hedge inflation as they have in the past—the conditions that made this work historically no longer apply
- Treasury Inflation-Protected Securities (TIPS) are a more reliable inflation hedge than equities in the current environment
- The historical high equity risk premium that offset inflation effects cannot be counted on going forward, requiring a shift in portfolio strategy
Secrets of Using Treasuries to Beat Inflation: Inflation Protected Treasuries are a better hedge for inflation than equities are. In this excerpt from a Finstream TV program, Michael Finke discusses how Inflation Protected Treasuries are a better hedge for inflation than equities are. To see more videos on FinStream TV featuring Professor Michael Finke, please click on this link: https://www.finstream.tv/featured/michael-finke/