6 Inflation Hedging Investment Options

by | May 10, 2023 | Invest During Inflation | 6 comments




Is the Federal Reserve losing credibility with its response to inflation?

First, we hear that they’re not concerned with inflation rising a little bit. Then there is the argument around it being transitory. Now we just saw the most significant increase in consumer goods for the last 30 years. It has risen 6.2%, and all of us are noticing it. Food, gas, cars, and homes prices are up, which means our dollar is going in the opposite direction. So we’re going to go over a few strategies that will help us fight inflation or even make it out stronger because of it.

You don’t want to miss this video!

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LEARN ABOUT: Investing During Inflation

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Inflation is a term that refers to the increase in the prices of goods and services over time. It is a common occurrence in most economies worldwide. As an investor, inflation can impact the purchasing power of your money. However, there are several investments you can make to hedge against inflation. Here are the top 6 investments to hedge against inflation.

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1. Real Estate
Real estate is one of the best investments to hedge against inflation. It is a tangible asset that tends to appreciate in value over time. Additionally, real estate provides a steady rental income that increases over time. As inflation drives up the cost of living, rent prices also tend to rise, leading to a higher income for the investor.

2. Precious Metals
Precious metals like gold and silver have been used as a store of value for centuries. During times of inflation, investors often turn to precious metals as a safe haven to preserve their purchasing power. Precious metals hold their value in times of economic uncertainty, making them a reliable hedge against inflation.

3. Stocks
Stocks can be an excellent investment to hedge against inflation, especially if you invest in industries that tend to perform well during inflationary periods. For example, companies that produce essential goods like household products, medical supplies, or food items are less affected by inflation than those in discretionary industries like luxury goods.

4. Treasury Inflation-Protected Securities (TIPS)
Treasury Inflation-Protected Securities (TIPS) are bonds issued by the U.S. Treasury that offer protection against inflation. These bonds are indexed to inflation and adjust their coupon payments and principal value with changes in the Consumer Price Index (CPI).

5. Commodities
Commodities like oil, gas, and agriculture products can also serve as an inflation hedge. As inflation drives up the prices of goods and services, demand for commodities generally increases as well, leading to higher prices for the commodities themselves.

6. Cryptocurrency
Cryptocurrency like Bitcoin and Ethereum is a relatively new investment opportunity that can also act as an inflation hedge. Cryptocurrencies operate independently of government control and are not subject to traditional inflationary pressures. They are often seen as a store of value and can be a useful tool as part of a diversified investment portfolio.

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In conclusion, investing in real estate, precious metals, stocks, TIPS, commodities, and cryptocurrency are some of the top investments to hedge against inflation. Diversifying your investment portfolio can help to mitigate the effects of inflation and protect your purchasing power over time. As always, it is crucial to consult with a trusted financial advisor before making any investment decisions.

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6 Comments

  1. John Cornwell

    Businesses determine inflation not the federal reserve. They are the ones who determine what the cost of goods and services they are offering is worth.

    The federal reserve could literally stop printing money for a decade but nothing is stopping businesses from raising prices anyways.

    Also before Covid bailouts and stimulus checks, most money is created by banks pulling it out of their ass when handing out loans.

  2. Andrew Ma

    Crypto is definitively speculative and you shouldn't put a penny more into it than you're willing to watch burn to the ground. That said, I think having zero dollars in crypto is a big mistake, as it's so likely to be a big part of the future. I have somewhere between 5%-10% of my money in BTC and ETH, I hold them in interest-earning accounts, and I'm more than content to just see what happens in the next decade. All life is a calculated gamble, and crypto is no different.

  3. Alphonzo Rawls

    I LOVE WHAT YOURE DOING MIKEY. THANKS FOR YOUR VALUABLE INSIGHT!!

  4. Vincent Slaets

    very good video! I see Bitcoin as a great long term store of value, and practically guaranteed to rise in price as the amount of fiat in circulation goes up. I dont see it as a good short term store of value because black swan events can cripple the price in a week or even a day, like you said. Then again, like we see in stocks or even fiat in some countries (venezuela, turkey, …), black swans basically have an effect on everything. No asset is 100% guaranteed to remain valuable. If for example the GME short squeeze bubble bursts, say goodbye to the stock market and in result the real estate market, fiat market, … Either way, I agree with all points made in the video, and a spread out portfolio offers the best chance of success IMO.

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