Peter Schiff says 'biggest victims of inflation' will be ‘killed’ if they hold this investment. How to prepare for 2026

Core Viewpoint - The traditional 60/40 investment portfolio is being re-evaluated, with Morgan Stanley advocating for a new allocation of 60% stocks, 20% fixed income, and 20% gold to better hedge against inflation and market volatility [1][6]. Investment Strategy Changes - Morgan Stanley's chief investment officer Mike Wilson suggests that gold is now a more effective hedge than traditional Treasuries, indicating a significant shift in investment strategy [1][6]. - The classic 60/40 portfolio, which historically balanced stocks and bonds, is now seen as inadequate due to inflation's impact on bond value [5][6]. Inflation and Bond Vulnerability - Inflation erodes the purchasing power of fixed-income investments, making bonds particularly vulnerable as their fixed payments do not adjust for inflation [2][3]. - Recent reports indicate a slight increase in bond yields, but the overall sentiment remains that bonds are suffering due to inflation pressures [4]. Gold as an Investment - Gold prices have surged by 136.15% over the last five years, with a notable increase in 2025, suggesting a growing interest in gold as a safe haven asset [8]. - Morgan Stanley's recommendation for a 20% allocation to gold is viewed as a substantial shift, potentially leading to significant capital moving from bonds to gold [8][9]. Market Trends and Predictions - Goldman Sachs has raised its gold price target to $4,900 per ounce by December 2026, reflecting bullish sentiment and expectations of strong ETF inflows and central bank purchases [9]. - The spot price of gold reached a record high of over $4,450 per ounce as of December 22, 2025, indicating strong demand [9]. Equities as Inflation Hedges - High-quality equities are also considered effective hedges against inflation, particularly those companies that can pass on rising costs to consumers [11][12]. - The ability of certain stocks to maintain or grow profits during inflationary periods is crucial for their performance [12]. Real Estate Investment - Real estate is highlighted as a powerful asset class for wealth protection against inflation, with property values and rental income typically rising during inflationary periods [16][17]. - Crowdfunding platforms are emerging as accessible ways for investors to gain exposure to real estate without the burdens of direct property management [19][20].