AsleepInYorkshire wrote:How have "we" decided inflation is going to take off? Are we correct? How can we possibly know?
Well if we look at recent history we can see how the price of certain goods, commodities and services have risen. We are aware of supply restrictions in the logistics train. Supply restrictions lead to some form of rationing and in absence of state dictate such rationing is achieved by price rises. We are aware that the supply restriction is caused by a lack of trained and tested people, but training and testing has it's own restrictions,
These are all things that HAVE happened and are happening.
You don't need a Cray supercomputer for rocket science (it dates back before computers were an industry) and this isn't even rocket science.
There IS inflation. Many central bankers claim that it will be transitory, but honestly would you expect them to say otherwise?
AsleepInYorkshire wrote:If you need to live on £2.5K per month in retirement the obvious way to protect that income stream is to make sure that the pension pot can suffer a 50% drop and still give you £2.5K per month. Alternatively have 2-3 years cash in the bank to allow market corrections to pass you by without taking from your pension pot?
There are ways of protecting your pot against downside without trying to time the markets. And if you're trying to retire too early and before your pot can protect your income then you may wish to reconsider your plan.
That's what I've decided and that's what I am doing.
I wish you luck in whatever you decide to do.
AiY
I too wish you luck. Myself I take the view that the one thing that is universally affected by inflation is cash, so would ideally like little. Certainly less than 2 years worth on hand. Those who have debts may even benefit, as would those issuing fixed interest securities.
I shall look at what and how companies are being effected by inflation. I doubt that my shares in Deagio, Unilever or Astrazenica will have their profits badly hit.
I think that an earlier post raised the question "at what point does asset allocation become timing the market".
I would argue that "timing the market" should only be considered by and of those who buy and sell the entire market. The rest of us try to position and reposition our holdings based upon current and predicted future events. We are seldom 100% right in our predictions, but I honestly think that more than 50% of those who try manage to predict the future tolerably well.
I started to become concerned about inflation back in May with the large increases in prices in iron ore, Aluminium, wood etc. I didn't expect problems with finding wait staff, lorry drivers or the increase in the price of gas. Tell me, are you sure that the evidence doesn't at least hint that there are probable causes for inflation?