Puntogf Antiques.

Are we heading for inflation? What about deflation? Are you unsure? A lot of people are so it is becoming difficult to know where to put your money. In a world that is so uncertain I think you should look at some alternative investments. No one can be sure of what is to come but we can do our best to prepare for it.

If we do see deflation then it is a good idea to hold cash. In deflationary times cash actually increases in value. This is one of the reasons that policy makers don't like deflation. People hoard money. They don't buy goods as they know they will be able to buy them more cheaply if they wait and as a result the economy slows down even more.

In deflation, is cash better than alternative investments? The answer is maybe. Even though we may get deflation, the policy makers and the Fed in particular want to avoid that at all costs. They are trying to achieve that by using the printing presses to print money. Even though the money might not be in the wider economy, it is in the financial markets. They then search for greater returns and may look towards alternative investments to find them.

There are experts on both sides of the debate but most of them think we will get inflation. In a scenario like this alternative investments tend to do quite well.

Either way I am sure that there will be a lot of large swings that we will see in the stock market. Alternative investments are usually pretty unrelated to these movements. You will be able to hedge part of the risk that you hold in equities.

No one can be sure of what will occur in the future. This means that you should allocate your assets well in order to protect yourself. You can do that by having exposure to alternative investments.