8 Financial Advisors on What They’re Doing With Their Money Amid High Inflation
Consumer prices in the United States rose at a slower pace than last month, but as Barron notes, inflation is still “extremely high.” Indeed, consumer inflation rose at an annual rate of 8.3% in April, from 8.5% in March, according to data released Wednesday by the Labor Department. But that’s still near a four-decade high. So we asked eight finance professionals what they were doing with their money in this time of high inflation. (You can use this tool to be matched with a financial advisor who might meet your needs.)
Increase My Commodity Exposure – Charles C. Weeks, Jr., Certified Financial Planner at Barrister
“I do the same with my funds as I did for my clients. About a year ago with fears of inflation and rising rates, we shortened the maturities of all our bond ETFs and added exposure to floating rates, but more importantly we allocated 10% to commodities . Earlier this year, I increased exposure to commodities by up to 20%,” Weeks says.
Reinsurance and Alternative Lending Funds — Elliot Dole, Chartered Financial Planner at Buckingham Strategic Wealth
“The risks induced by high inflation and reliance on equity and duration risk alone can be managed by adding alternative investments. Reinsurance, long-short factor strategies and alternative credit funds have a place in long term in my own allocation. A well-constructed allocation complements a portfolio of stocks and bonds, offering some inflation protection in return for accepting their unique risks,” says Dole.
Online savings accounts for funds I’ll need in 3 years or less — Brendan Mullooly, Certified Financial Planner at Mullooly Asset Management
“I continue to channel savings planned for less than three years into online savings accounts. Just because inflation is up from recent years doesn’t mean it’s safer to invest short-term dollars in long-term assets. To neglect to consider the time horizon of an investment at the outset is to play with fire. For economies that have a longer track, I continue to believe that a diversified portfolio of equity ETFs will provide the best possible hedge against inflation over my decades-long time horizon. So I have a barbell approach with online savings accounts on one side for short-term goals and retirement accounts with diversified equity ETF portfolios for long-term goals on the other,” explains Mullooly.
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Invest in Small Amounts Regularly – Kevin Mahoney, Certified Financial Planner at Illumint
“I know that if I invest regularly, in relatively small increments as additional savings become available, the stock market will reward my patience and calm over the long term. How will my returns compare to the rate of inflation on the same period? I can’t be sure, but I know I’m doing pretty much everything I can while keeping my financial strategies as simple and stress-free as possible,” Mahoney says.
Dividend Paying Companies — David Totah, Certified Financial Planner at Exencial Wealth Advisors
“I try to keep all or most of my equity investments in companies that have a consistent track record and help invest in companies that also pay dividends. I look for companies with strong balance sheets and without excessive leverage. With interest rates rising, investing in highly leveraged companies can be risky,” says Totah.
I-Bonds — Tommy Blackburn, Certified Financial Planner at Mason & Associates
“I started buying Series I US Treasury bonds late last year and bought more this year as allowed. Since I got married we’ve been able to buy $20,000 l last year and then buy another $20,000 this year. From there we started buying them in our revocable trust and I plan to continue buying them consistently until I’m about two-thirds my money and my emergency fund,” says Blackburn.
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Alternative Asset Strategies — Patrick E. Leardo, Director of Domain Capital Group
“I seek to invest in more structured alternative private market opportunities. These opportunities may include specific structured alternative strategies such as entertainment royalties or specialized real estate strategies which can provide consistent cash flow depending on the opportunity structure. I would also look for stationary, uncorrelated physical assets in the alternatives space, such as forest land. I think the relatively low volatility, long-term cash return potential, and option exit makes this strategy, and other alternative asset strategies, attractive during market cycles like the ones we are experiencing,” says Leardo.
Consumer Equities — Jonathan Blau, President and CEO of Fusion Family Wealth
“I invest in what is arguably the most consistent and best long-term inflation hedge that mankind has ever created, consumer stocks,” says Blau.