High inflation is the story of the year, and moving forward the Fed will definitely maintain it’s hawkish stance. The unknown right now is how fast and how quick the balance sheet runoff is going to be. Regardless, this environment does not bode well for equities and bonds in general.
Gold will probably see a drop back down below 1700 as short term inflation slowly dies off, and nominal rates increase, resulting in real interest rates increasing back up.
The only options left that I see are real estate and cash. Real estate can be easily accessed via REIT’s. However, I am not choosing to deploy into REIT’s at this point in time because to get return from the REIT, you need to hold until the dividend payout date. However, I would like the flexibility to deploy my cash anytime I want. As such, the best option for me right now is to hold cash and cash-like liquid instruments. The option of choice for me, based in Singapore, is the Singapore Savings Bond. This is a highly liquid instrument, redeemable anytime you want, and principal guaranteed! Right now, I’m sitting on 40+% cash, and it will go into purchases of SSB’s at the end of april as I need time to convert currency to SGD and consolidate all my spare cash.
Little Monkey 