STRATEGY
PORTFOLIOS
Diversification: An Investor’s Safety Net ANALYZING THE ASSETS THAT CAN HELP HEDGE AGAINST INFLATION
by W. J. Mencarow
M2MONEYSUPPLY
Monthly Average Seasonally Adj. Jan. 1959 - June 2021 (FRB)
“The most significant benefit of a diversified portfolio is psychological stabilitywhen you need it the most.” —Naved Abdali Twenty percent of all dollars print- ed since 1792 were created in 2020. Economics 101 says that too much money in circulation causes infla - tion. Here is the most recent chart of the growth in the money supply. It screams “more inflation ahead!” Real estate is a proven inflation hedge. But that is not true of every type of real estate. Different ones perform differently at different times. That is why you need to diversify. But
Year-to-Year % Change
M2 ($Trillions)
22 20 18 16 14 12 10
35
30
25
20
15
8 6 4 2 0
10
5
‘66 ‘71 ‘76 ‘81 ‘86 ‘91 ‘96 ‘01 ‘06 ‘11 ‘16 ‘21 0
‘61
Published: July 27, 2021
ShadowStats.com
62 | think realty magazine :: october 2021
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