In last couple of months ago we see a devastating fall in Federal Reserve System. Recently investors are concerned about the economy. They are willing to make them ensure about their investment security. They like to buy TIPS, Short Treasury Bonds, Stocks, Real Estate, Commodities, Gold, Currencies or invest regard those warnings about inflation as fear mongering.
Federal Reserve (Fed) announced its latest QE3 formula. According to which Fed is moving from the inflation to the employment. Fed Chair Bernanke considers a healthy housing market to be the zest to healthy investment. But it seems that it is in fear of future inflation warranted. According to the recent database marketers are in fear about looming inflation which is in the initial flare up position. TIPS which are “inflation protected” Treasury Securities that are linked to the Consumer Price Index (CPI) are recently intervening by Fed. Investors are taking it as the protector of the purchasing power. In the time of buying the TIPS or any other securities Fed cannot ensure them are they really protected. Recently besides the investor the Fed also are moving towards to TIPS. CPI may not be reflective of the basket of goods and services consumed by the investors as they approach retirement given. TIPS payouts are adjusted using the CPI which has seen methodology changes many times. But above all the facilities TIPS may fail to provide adequate protection as it is preserving the purchasing power.
Treasuries are costly. If anyone buys an ETF shorting Treasuries, the cost of the ETF is to be added. Shorting Treasuries might make sense for the present investors. Collecting those is also problematic for the perfect timing.
Stocks could be trying as if previous actions are not facilitating. Stock price is rising as QE has pushed stock prices higher. Hardly is it without problem for Fed to praise. Our policymakers are ensuring us that the price change is predictable though it is not examined.
Real estate is highly bottoming out in U.S. Normally real estate is purchased via the loan money and makes it speculative bubbles such as the most recent episode. REIT which seems highly correlated with the equity markets makes it ensure that anyone can hold the propriety.
For the better protection some people are likely to have gold as their major tools. People do it as they like gold from the ancient time. They believe that it will give them the strong badge in time of inflation but the price inflation has impact also on gold. So it is also volatile to have gold.
Inflation can be solved by using the combination of the investment. For which an investor should take the professional advice along with the market update information. Fed is also working to save the people in time of the inflation if the situation seems to be ahead. Some people believe that they are highly capable of managing their portfolio and can manage the situation in time of inflation. From the previous index it has shown that gold has gone up by a factor of about 7 sciences it lows. So this shows that the price is not highly inflated for gold and it is the best option for investment.