Inflation is here, and it's getting ugly. The good news is that investors can do something about it.
David Schassler, Portfolio Manager of the Inflation Allocation ETF, (RAAX) - Get VanEck Inflation Allocation ETF Report, at VanEck, "go out and buy real assets, because those are the ones that have done best during times of high inflation."
Recently, Susan McGinnis spoke with David Schassler, Portfolio Manager of the Inflation Allocation ETF, RAAX, at VanEck during TheStreet's FREE webinar, How to Play the Inflation Trade. Watch an excerpt above.
WATCH: How to Play the Inflation Trade, a FREE webinar, hosted by Susan McGinnis.
Editor’s note. The webinar was recorded on October 28, 2021.
Video Transcript Below
Susan McGinnis: "As we move into the best strategies to rebalance your portfolio, Where does cryptocurrency fall in all of this? We don't have a huge historical precedent to learn from. David?"
David Schassler: "Crypto is challenging gold. Gold and crypto, when you start to think about them, there's a lot of the same attributes. There's a finite supply. (There are) only 21 million crypto coins can be made, so you've got this finite supply, just like you do with gold. It's easily exchangeable to dollars, so another similarity. And it can't be counterfeited.
When you start to think about this, the new generation is looking at this as a gold alternative. And since cryptocurrencies have come out, clearly the total returns well, well exceed that of gold and really everything else. And on a calendar year basis, cryptocurrencies have outperformed gold almost every year since they launched, specifically talking about Bitcoin. I think it's interesting, and I think it deserves a spot in the portfolio."
Schassler: "It's very volatile, so you have to risk weight it. We do own it in our portfolios. We do own a lot more gold than we do crypto, but we think that it deserves a spot. Unlike gold and the other real assets, we can't go back and look at the 1970s and other high inflationary periods and say, ah, I can tell you that it's an inflation hedge because I can show you historically that it did that. We can't do that because it's a new asset.
But what we can do is we can look at the attributes and say it has a lot of similarities to assets that we have historically performed well in high inflationary periods. That's what we're doing. That's why it made its way into the portfolio. And so far, it's been a great performer for us."
Video Highlights | How to Play the Inflation Trade
- 00:06:30 Can the Federal Reserve stop inflation?
- 00:10:40 Stocks to benefit in an inflationary environment
- 00:11:20 Inflation-hedging equities with strong yields
- 00:12:30 Key moves to inflation-proof your portfolio
- 00:21:30 What history tells investors about inflation
- 00:23:00 Inflation Allocation ETF, RAAX
- 00:30:20 Companies investing in the green transition
- 00:31:30 Why investors should consider the energy sector
Schassler says there are steps investors should take now. Watch his extended interview below.