Hey Ben, Check Out These Inflation ETFs - TheStreet

Hey Ben, Check Out These Inflation ETFs

The Fed has been battling deflation and downplaying inflation for so long, one wonders why these ETFs have shined so brilliantly in 2009.
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By Gary Gordon of etfexpert.com

With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.

-- Fed Chairman Ben Bernanke and voting members of the FOMC

I understand the reasoning behind the

Fed

's decision to leave interest rates at 0%-0.25% for an "extended" period of time. They hope to stabilize real estate prices, foster the flow of credit as well as tame unemployment. (They've got a whole lot on their plate!)

Still, is the FOMC turning a blind eye to the

deterioration of the U.S. dollar

. Are they unconcerned about foreign entities shying away from both the currency and U.S. government debt? How long will the Fed wait before it endeavors to preserve purchasing power, as opposed to allowing inflation to get ahead of the committee's projections?

Just a few thoughts ... but I digress.

In truth, I am more interested in the inflation-fighting ETFs. After all, the Fed has been battling deflation and downplaying inflation for so long, one wonders why these ETFs have shined so brilliantly in 2009. (They are

They are the

PowerShares Dollar Bearish

(UDN) - Get Report

, the

iShares TIPS Bond Fund

(TIPS)

, the

Power Shares DB Total Commodities Index

, the

SPDR International Government Inflation Protected

(WIF)

, the

SPDR Gold Trust

(GLD) - Get Report

, the

PowerShares DB Precious Metals

(DBP) - Get Report

and the

PowerShares DB Base Metals

(DBB) - Get Report

.)

How impressive are these results? One could have held firm to a singular investing theme (i.e. guard against inflation), and one would have outperformed the

S&P 500

with significantly less

market risk

.

Ironically enough, the Fed has thought (and continues to think) that all's well on the inflation front. Perhaps that'll turn out to be true. However, if 2010 is anything like 2009, then investing in inflation-fighting ETFs will pay off handsomely ... regardless!

If you'd like to learn more about ETF investing... then tune into "In the Money With Gary Gordon." You can listen to the show

"LIVE", via podcast or on your iPod

.

At the time of publication, Gordon was long TIP, WIP, GLD and DBP.

Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. The company and/or its clients may hold positions in the ETFs, mutual funds and/or index funds mentioned above. The company does not receive compensation from any of the fund providers covered in this feature. Moreover, the commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities.

Gary A. Gordon, MS, CFP is the president of Pacific Park Financial, Inc. He has more than 20 years' experience as a personal coach in money matters, including risk assessment, small business development and investment. Gordon is often asked to consult as an educator. He has taught financial concepts in Mexico, Singapore, Hong Kong and Taiwan. He also wrote the draft copy for a McGraw-Hill publication, Maverick Investing. Gordon hosts "In the Money with Gary Gordon" on San Diego's 1700 AM and writes commentary for the International Business Times as well as TheStreet.com.