4, 2002; Bond Markets Pointing to More Inflation
the expected inflation rate remains low it seems to be trending up in the past
few months (see Chart). Since the
turmoil surrounding the bankruptcy of Enron, the yield on
the inflation trend continue to strengthen it implies more demand for energy
investments. Because we all need
energy every day we will readily pay a price that keeps up with inflation.
We don't know if the trend is going to continue, but we believe a
diversified investor should have protection against that possibility.
TIPS and energy stocks offer such protection.