Wednesday, October 19, 2011

"How Bill Gates is betting on inflation" (he's investing in little-known inflation funds)

The Consumer Price Index headline number came in as expected this morning, up 0.3% with core at 0.1%.
From MarketWatch:
If you’re retired, or nearly retired, you probably want three things from your investments: Safety of principal, a reasonable rate of interest, and some security against the risks of inflation down the road.

Good luck with that.
Developments in the financial markets, and the Federal Reserve’s policies, have driven down interest rates and closed off most of your options.
What can you do?
Here’s something intriguing. Microsoft founder Bill Gates has been quietly taking advantage of a little-known investment on the stock market that may satisfy all three conditions. And it’s open to anyone....
....So what is Bill Gates doing?
The Microsoft founder, and one of the world’s richest men, has been quietly building his position in two closed-end funds that invest in inflation-protected bonds. What makes these funds intriguing is that they are effectively offering you a way to buy inflation-protected bonds at 11% off. For bonds, that’s a hefty saving....MORE
 See also yesterday's "Research Affiliates' Rob Arnott: Double Dip and Stagflation".