Friday, October 2, 2009

Pauls Current Financial strategy

As I am convinced we are entering a new inflationary time. (which in turn probably means higher interest rates)

We actually already have currency devaluation in Australia but not against the currencies of the world (at the moment we are looking pretty good and I think the AU dollar will only get stronger over the next 5 years against both the UK pound and US dollar).

The AU dollar has devalued (along with all the major international currencies) against commodities. This makes perfect sense as all the major economies of the world have been busy printing money (in huge volumes in the case of the US approx 4 x the US GDP [this figure will be disputed - I have discussed this in an earlier post]).

As a result of this my current strategy with regards to my DIY superfund is

1. Invest in companies like warren buffet (this is a natrual hedge against inflation because I will be looking for companies with a consumer monopoly and therefore the ability to easily raise prices with inflation and low debt)

2. Invest in rural agricultural land (as food prices will be a good hedge against inflation and also in the long term is likely to continue to become more expensive - In the last 6 out of 9 years the world has not produced enough food for it's population.

3. Invest in gold and silver as a hedge against inflation. Also as countries try to untie themselves from the US dollar countries will start to increase their gold reserves. China is currently doing this now - see article

Anyway this is just what I am thinking. I am allways open to any feedback on anything and welcome you to comment on this article below

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