As far as I can tell, this article’s advice is not tongue in cheek. In fact, I think the author is quite earnest. His idea is that first you get to guess whether the economy going forward will have inflation, deflation, or be just right. Second, you put in a completely different asset allocation depending on your guess, incorporating insurance (in the form of assets that are expected to hedge your bet) in case you are wrong. Third—although this is not explicitly discussed in the article—you have to hope that the various assets in the portfolio, including the “insurance,” perform the way they are expected to depending on the scenario that unfolds.
Let’s hope your crystal ball isn’t in the shop! Given that we are dealing with an economic scenario that no one has seen in their lifetimes, what are your odds of forecasting correctly and then having all of the assets perform as expected? Yet, unless you are using some type of tactical, trend-following approach, this is the kind of silliness you are forced to deal with. Do you really want your retirement or your children’s college educations to depend on your ability to guess correctly?
Posted by Mike Moody 
