Monday, August 17, 2009

What Assets Are Going To Beat Inflation In the Coming Ten Years?

"So what do you think? Would you try it?"

"Try what?"

"Inflation indexed bonds mate!"

Last night was trivia night in Elwood. Your editor sat across from Australian Wealth Gameplan editor Kris Sayce. Between questions about how many venomous snakes there are in Australia and whether New South Wales is larger than South Australia (it's not), we found the time to query him about whether buying inflation indexed bonds from the Australian government was a good investment strategy.

"The problem with them," he said, "is that you're relying on someone else to tell you what the rate of inflation is. That someone else is the government. And they are probably lying about it. It doesn't really offer you a hedge against inflation of they are under-reporting the real inflation rate." (more)

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