Here are Todd’s latest fun picks to take your financial skills to the next level...

Wow! The most recent issue of this newsletter was a hit!

Who would've thought you'd want to read dry, academic research, right?!?

But I suppose learning how to profitably invest during today's inflationary/stagflationary environment overwhelmed the desire for entertainment value.

The message I'm getting is that actionable stagflation investment strategy is poorly understood because investors have been taught to (falsely) believe the only investment solution is a passive index portfolio. Not true, and results prove it!

Few people understand how investing works at a deeper level, and specifically during inflationary/stagflationary environments. 

So I did a deep dive to uncover more resources to help you. The next three issues of this newsletter will continue to deepen your investment knowledge.

My goal is to make the investment situation you face today so obviously clear that you know exactly what to do and how to get it done.

We'll start today with the question on everybody's mind - is our current inflation transitory or longer term?

Surprisingly, the answer is clear because it's more of a math problem than a prediction about the future.

Once you know the answer to the inflation question, then our next two resources show you what to watch out for given what has already transpired this year...

I hope these educational resources help you make smarter decisions about how to manage your portfolio.

(FYI, my recommended investment solution has worked exactly as prescribed to protect my student's portfolios from all this adversity. When you're ready to take action on what these resources are teaching you, this page has the answer you're looking for...)

What We Know About Future Inflation Based on The July Inflation Print - Campbell Harvey (Video - 10 minutes)

Will our current inflation problem be transitory, or persistent? Media pundits like to imply the answer is unknowable, but that's not true. Campbell Harvey, Partner and Head of Research at Research Affiliates, goes beyond the headlines to offer insights informing his inflation outlook. The good news is the answer is more of a math problem than a forecasting issue. It's knowable.

New Rules For Diversification - AQR Research (12 pages)

Now that you know inflation isn't going away anytime soon, the next question is how to prepare your portfolio for this different kind of risk? Persistent inflation means there's little chance of the Fed running to the rescue like in 2000, 2008, and 2020. It's a new investment epoch (epochal change), as I've warned you in these pages for the past year. This research piece shows how passive stock/bond portfolios are among the worst performers during similar epochs in the past, and (no surprise!!) trend following and commodities are the top performers. See figure 2 and figure 3 on pages 5-6 for some surprising results. Given the clear implications of this research, doesn't it make sense to at least consider my recommended done-for-you solution for at least part of your portfolio? The recent rally has given everyone another window of opportunity to properly diversify your portfolio with minimal loss/pain. It's still not too late to take prudent action (but we don't know how long that'll be true).

What Happens When Commodities Are The Only Asset In An Uptrend? - Alpha Architect (5 pages)

My Expectancy Wealth Planning course community asked last month during our weekly office hours support call what it means when commodities are the only asset in an uptrend? I explained how the situation was rare, but not unprecedented, and it had serious investment implications. Shortly after that, Wes Gray at Alpha Architect noticed the same anomaly and published his research so all could benefit. Pay particular attention to the final paragraph where Wes asks, "Why Do We Care?" As Wes explains, "The last time this happened we entered a long period of high inflation and poor real returns (for a conventional stock/bond portfolio)... The recent past has arguably made investors complacent in their reliance on a stock/bond portfolio as an end-all-be-all solution. When history tells us that incorporating commodities (and trend following) into a portfolio probably makes sense from a diversification standpoint."  Again, my recommended done-for-you, low-cost solution to accomplish what Wes, and all these other resources recommend, is here. I hope it helps you secure your financial future through these difficult times ahead.

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