Investing assuming UK stagflation

amcluesent

So, all the economic indicators point to the UK entering a period of stagflation with double-digit inflationary increases in prices and a slump in demand for products and services. Everone will feel poor and stop buying everything but essentials. Some people may remember 1973-1980!

What investment approach would be optimal, assuming stagflation in the UK and USA?

purch

You could always join the end of the queue at Beachy Head !!!:eek:

tradetime

Conventional wisdom suggests a very defensive approach. People find it more difficult to cut back on the basics.
Food - everybody's gotta eat
Energy - fuel, electricity, utilities. Water
Household items - toothpaste, soap, detergents/cleaners, etc
Waste disposal - we consume alot, then throw it away. This must be managed somehow...transported, then dumped to landfills, recycled in some cases
Medicine...(heathcare a maybe) - people get sick, and they always will, regardless of our technological advances. Plus, when times get tough, people will want stress relief if they can afford it. Wonder how Xanax, Zoloft, Prozac will move...hmmm....
Communications - Business will still take place.
Gold has always been considered a hedge against inflation.

Index linking spare cash/savings probably not a bad idea.

But that as always is just my opinion.

shaunrc

Hi

There are some sensible suggestions above but if you think inflation is really going to get a grip then.

1. Buy index linked gilts ( bonds) fron the government or
2. Buy index linked certificates from National Savings

These are linked still to RPI rather than Gordon Brown's CPI which is good for us as it records a higher number ( currently around twice as much).

The trouble with utilities is that they offer a yield which in real terms will be affected by any inflation, so whether you buy them depends on how bad you expect things to get.

So you pays your money and.........