As advisors and investors looking for solutions to rising inflation, Fred Hubler, president and chief wealth strategist at Valley Forge, Pa.-based Creative Capital Wealth Management Group, thinks his firm has a solution.

“We’re pretty damn sure that inflation is going to be persistent,” said Hubler. “I was at an event where a speaker asked the audience who owned rental property to raise their hands. Then they asked anyone who would lower rent when inflation goes away to lower their hands—and no one lowered their hands. If you ask if salaries will come back down after inflation goes away, you’re not going to see many hands. A lot of the places where we spend money are very hard to walk back prices from. It doesn’t make sense to think of inflation as transitory.”

To illustrate inflation, Hubler asks people to put items they might be interested in in the “Saved For Later” section of their Amazon cart on a Friday, and then check the prices again on Monday—which usually results in several prices going up.

This puts the typical retirement investor in a bind, said Hubler. The yields they receive from their investment portfolio do not go as far during periods of inflation. The danger is that these investors, who make up a large portion of the wealth management industry’s clientele, begin to reach for yield.

“When chasing yield, you end up buying things you would not normally want to own and taking unnecessary risks,” he said. “We’ve been pessimistic about the stock market and we think we’re long overdue for a correction.”

Gold, a traditional hedge against inflation, is also problematic for retirement investors because it generates no income, said Hubler, and the best way of investing it is buying it directly, which brings with it expenses for transporting, storing and selling the asset.

“Lately, we think cryptocurrency has been a better hedge than gold, even though we like the idea of hard assets as an inflation hedge,” he said.

Founding an RIA in the shadow of the headquarters of investment behemoth Vanguard, Hubler carves out a niche for creative capital by specializing in alternative investing. Alts don’t have public markets to contend with, he said, which means fewer alts trade at high premiums or discounts.

Hubler is crafting yield-generating solutions in several different alternative asset classes..

“We’ve used multiple versions of private preferred stock,” he said. “These are companies with public common shares that have an offering of private preferred stock that tend to pay around 5.5% per year, which means we’re getting reasonable yield without going crazy taking risks and they have zero exposure to the fluctuations of common stock.”

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