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'False' Diversification May Prove Costly In 2007

This is all off the top of my head -- so forgive any logic errors. I offer this in hopes of an interest discussion thread that could follow. Thanks for askg the question.

Contracts providing fixed streams of dollar income would protect against deflation in the US.
GICs might be such an example, as would fixed annuities. Perhaps preferred stocks with required and cummulative dividends would be a deflation hedge. Then with careful research one could probably identify companies with long dividend histories that would also prosper in a deflationary enviroment -- they would probably need to be actually or nearly debt free because debt repayment would become more difficult in a deflationary enviroment. Perhaps certain debt-free fixed rate lenders with fully credit worthy debtors who would not default in a deflationary environment would do well. What other kinds of companies would do well?

'False' Diversification May Prove Costly In 2007

Excellent and timely article.