Right now, investors should be concerned about stagflation and not inflation, said Carrie Coghill Kuntz, president and co-founder of D.B. Root & Company.
“We’ve heard so much about monetary policy causing inflation because of the idea that we’re going to get demand,” Kuntz told CNBC.
“The components here are prices going up in demand and when you have a scenario where prices are going up but don’t have demand and economic growth, you have a period of stagflation.”
Kuntz said investors could prepare their portfolios by focusing more on real assets commodities.
“We’re looking at the value of the dollar and the tremendous decline that we have been experiencing, which is driving commodity prices up," she said.
"So for investors, they need to look beyond the scope of U.S. stocks because you find many opportunities that exist in the commodities market, the emerging markets and even in Treasury inflation protection securities (TIPS).”
Although not an immediate concern, Kuntz said she expects to see inflation returning by year-end — and told investors how they can prepare.
Allocate "in TIPS at somewhere around 20 percent — you’re going to find that as we get inflation, these types of bonds will offer very good opportunity and price appreciation. Looking at the emerging markets also, with the value of the dollar declining, you have natural-resource-rich countries that benefit from that.”
Disclosure:
No immediate information was available for Kuntz or her firm.
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