what to buy if inflation returns

Inflation will return at some point. Maybe not next month or next year, but at some point. So what to buy for long term ownership? I'm not saying these should be bought now, but what assets you would buy with an expectation of higher inflation in the next few years.

First, please don't mention gold or commodities. There have been good arguments made gold is essentially a zero-coupon perpetual bond. In any case, I'm not sure whether commodities and gold or certain currencies are good in an inflationary world or not. My guess is as good as yours.

Some other ideas, please contribute your own:

a) residential housing. Right now there is a glut, but that won't last forever. Housing both generates income and is a long term asset (ie land). You at least want to own your own ie lock in this year's rent.

b) companies with pricing power. This includes any sort of brand name, for instance consumer packaged goods companies, especially of necessities.

c) royalty collectors. WYN for instance collects royalties from motels.

d) distributors. Most distributors are essentially short term lenders. They finance inventory for retailers and manufacturers. They shouldn't be hurt and might be helped by inflation.

e) spread skimmers. Schwab and trust companies like Mellon Bank (BK) have large pools of short term cash on which they earn a spread, at least when interest rates are higher. Not now, of course. Brokers in general don't seem likely to be hurt by inflation.

f) railroads? the rolling stock is depreciating, but the tracks themselves are irreplaceable. Goes both ways.

g) land. If you can afford not to earn income.

 

There may be some "free money" to be made with trading TIPS bonds versus traditional bonds. We'll see.

 

Shorting zero coupon bonds too. Forgot the most obvious trade.

 

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BillJoe;
your guess is probably better than mine on [c] royalty collectors Also''IF inflation returns''...surely you jest;
or else you grow you own food & own your own oil well/refinery...LOL

Gold , copper, silver,still looks good;
if one has made some money investing/trading. Buy & hold on gold, well 10%-15% is usually good advice.Not a prediction.

I also like a certain amount of Federal reserve notes[ ]
even though as Larry Bates[bank seller/gold silver dealer ]says- that loanership.

Gold ,silver, land[paid for]-thats ownership, not loanership

Even though Mr JPM /J Dimon called a'' bottom'' in RE/election year;
RE[real estate ] appraisers talking about inventory/iceberg inventory.......JPM should be fined for a conflict of interest;
bear markets/ buyers markets are full of bottoms.JPM should be ashamed of themselves for that self serving election year propaganda.

 

Inflation never left.

 

Farmland is another good one.

I'm just not convinced gold is a good inflation hedge. Gold generates no income, so why would I own gold if I could own a money market fund paying a nice return? Hard to believe gold will appreciate compared with income-paying assets.

 

Is there a money market fund paying a nice return?

 

When inflation returns, yes.

 

By then your nice return on your money market fund won't be so nice in terms of inflation eating away at it.

 

agree it didnt leave and isnt leaving anytime soon......if anything its going to be more out of control in the months and years to come.