Wu Danru: The inflation “gray rhino” is here! Are you still doing stock and bond allocation?

Taiwanese stocks, U.S. stocks, and the Trump family have recently hit new highs one after another. Despite the U.S.-Iran conflict not yet coming to an end, oil prices remain elevated. In her latest release, “Wu Danru’s Practical Business Institute for Life,” well-known author and TV host Wu Danru issues a warning: an obvious inflation “gray rhino” is about to arrive! She also shares her personal observations and asset allocation viewpoints on the current overall macroeconomic environment.

Wu Danru does not agree with a stock/bond allocation, and she never buys bonds

In the video, Wu Danru clearly offers a different view on the traditional balanced strategy of stocks and bonds. She points out that, given the current macro environment, U.S. Treasury bonds face potential pressure from excessive issuance and from parts of the world’s central banks’ de-dollarization. As a result, their effectiveness as a safe haven for capital is changing. In addition, although non-investment-grade bonds (High-yield Bonds) offer higher yields, the default risk that comes with them will increase significantly during periods of economic volatility. Therefore, over-relying on bond positions may not effectively hedge the risk of falling purchasing power for assets.

The inflation “gray rhino” is threatening us—stocks still outperform bonds

Wu Danru believes the “gray rhino” inflation that is gradually closing in and is extremely destructive is investors’ biggest threat right now. In response to inflation pressure, she says stocks are absolutely better than bonds. She also mentions that “national ETF” 0050 has risen from around $50 all the way to nearly $100, reflecting not just growth in corporate earnings, but more likely the result of a broader decline in purchasing power of money and a general rise in asset prices—meaning inflation pressure has already permeated the market.

In terms of specific sectors, Wu Danru advises investors to pay attention to manufacturing industries and infrastructure-related targets that have long been undervalued. At the same time, compared with simply holding fixed-income products, allocating moderately to index-based stock funds with growth potential can better maintain the real value of assets and long-term benefits in an environment where prices are rising.

Alternative investments should be kept below 5%—Wu Danru holds spot Bitcoin

Regarding Real Assets, due to structural increases in raw material and labor costs, she believes real estate in prime locations and newly constructed projects have the characteristics of cushioning downturns and preserving value. Under expectations that inflation will reduce the purchasing power of money, these assets are less likely to experience large-scale price corrections. As for gold, although geopolitical risks and central bank reserve demand provide support for gold prices, considering that its recent price is already at a high level, there is a risk of a technical pullback. She also suggests that when considering alternative investments such as gold or crypto assets (Alternative Investments), one should strictly keep the weight within 5% of total assets. And she also said outright that she holds spot Bitcoin, but she emphasizes that this is purely “speculation” rather than investment—if there’s profit, she will sell it in stages. After all, the Trump family also has businesses related to cryptocurrencies.

This article, “Wu Danru: The inflation gray rhino is here! Are you still doing stock/bond allocation?” was first published on Chain News ABMedia.