SYE - Best Strategies For Inflationary Times

• Episodes of a high and rising inflation rate are mostly due to unexpected inflation shocks, and assets may reprice materially during such regimes.
• Unexpected inflation is bad news for traditional assets, the 60-40 equity-bond portfolio performed poorly during inflationary regimes, with a -6% real annualized return.
• Neither investment-grade nor high-yield corporate bonds came close to protecting purchasing power, with both having a -7% real annualized return during inflationary regimes.
• Futures trend (time-series momentum) performance is strong during inflationary periods.
• Treasury inflation-protected securities (TIPS) are robust when inflation rises, giving them the benefit of generating similar real returns in inflationary and noninflationary regimes.

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