How Can I Protect My Portfolio Against Inflation?

by | Oct 26, 2022 | Inflation Hedge | 20 comments

How Can I Protect My Portfolio Against Inflation?




A common question I’ve been hearing lately is: I’m worried recent government intervention will lead to rising inflation – how can I protect my portfolio against inflation?

Many are worried that the stimulus bills the government passed, which gives money and forgivable loans, to businesses and individuals will lead to inflation. To pay for this stimulus, the government is printing money, typically this helps prop up the economy in the short-term, but often the economy suffers afterwards.

Several asset classes typically perform well in high inflationary environments. Tangible assets, like real estate and commodities, have historically been seen as inflation hedges. Some specialized securities can maintain a portfolio’s buying power including inflation-indexed bonds. And even investing in stocks can hedge against inflation risk.

Real estate works well in a high inflation environment because rising prices increase the resale
value of the home over time, but also, if bought as a rental property, real estate can be used to generate income. Just as the value of the property rises with inflation, the amount tenants pay in rent can increase over time.

For centuries, the leading investment in times of high inflation has been gold. This causes its price to rise in global markets. Gold can also be purchased directly or indirectly.

Equities are used to help protect against purchasing power risk. While inflation has averaged about 4% annually over the past 50 years, stocks (as measured by the S&P 500 Index) have returned around 10% annually during the same period. Therefore, the “real” (inflation-adjusted) growth rate for stocks has been around 6% per year.

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Investing in bonds may seem counter-intuitive as inflation can be bad for fixed-income instruments. Inflation often causes interest rates to rise which causes bond prices to fall. However, to overcome this obstacle, there are multiple ways to hedge inflation risk. One of the more common tools investors use are Treasury inflation protected securities (TIPS). TIPS deliver the credit quality of the US Treasury, while hedging against inflation….(read more)


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20 Comments

  1. Health Wealth Happiness - Brendan

    Thanks for watching! Are you concerned about inflation? Have you done anything to position your portfolio to profit from a high inflation environment?

  2. Daniel Braun

    Inflation is a real concern so this is a useful video. Very well spoken and well explained too so nice stuff here man!

  3. MAURI'S WORLD

    Inflation is a silent killer! Not enough people talk about inflation risk, liking and subbing for more unique content!

  4. Personal Finance

    Time and compound interest are your money's best friends! Hope to see more!

  5. Andy Cassidy

    Great video. Inflation can be a havoc to finances if not accounted for. Looking forward to more content!

  6. BAYLON, Jericho

    Sending my gift already stay connected keep safe.

  7. Investing Made Simple - Nathan Sloan

    Hey Brendan…. yes, we know that it's the goal of the fed to depreciate the currency by 2-3% per year so not good to be a saver. It's also the reason why I am a big fan of gold and silver. I think we are on the verge of a bull market in precious metals. Nice video. Stay safe all.

  8. Fifi Finance

    nice topic to discuss in detail, we should always be worried about inflation – the silent killer of your money ha ha… make it sound like a ninja assassin he he

  9. Ahmet Kaan

    awesome content with awesome tips thanks for all of them, they are gonna help a lot. Keep up your amazing work. Let's support each other as small youtubers…

  10. Project Influencers

    Gold is probably a good call for inflation. Thanks for the upload 🙂

  11. Asad's financial diary

    Great video Brendan! Like#25 and sub # 166 here to support you. would appreciate your support as well. lets stay connected and grow together!

  12. Classy entrepreneurss

    Great tips! I will use them all! Thanks a lot for sharing! Just subbed! 🙂

  13. Ryan Chang

    The milk in the thumbnail confused me, but everything cleared up now! Inflation is a slow but steady killer, so it's so important to make your money work for you. Thanks for sharing Brendan!

  14. Bro Lessons

    Inflation is such an important term that I really think many don't understand correctly, thanks for sharing this video !

  15. Jose Rojas

    Great video Brendan! Inflation is definitely a silent killer….

  16. Benny Business

    Yip rocking advice as always. I agree with index funds in this context

  17. Wealth Wisdom Financial

    Inflation for the milk is one thing. We can make a few extra dollars to cover the cost of the increasing milk. My fear is not with the milk but with other industries, Some of the biggest industries I have seen with huge inflation is healthcare and education. The challenge is relatively speaking our income is not keeping up with that cost and that was before the 2020 financial crisis. I like to put some sort of inflation hedge protection in my financial portfolio for sure

  18. Make / Save / Invest

    Printing money is helpful when there is no other way to help. BUT, as you said, long term can be very very dangerous!! Loved watching!! Thanks for sharing my friend!!

  19. LifeWithVinceLuu

    Which REITs do you recommend? I've been looking through some though haven't decided on one just yet! Definitely need to diversify my portfolio. 50% of my portfolio is in VOO and the other 50% is in single companies. Haha.

  20. STEELPHIT

    Great tips Brendan! Thanks for sharing with us. Just subscribed, excited to support a fellow small YouTuber! We have an overlapping audience of men on the path to wealth. Looking forward to continued engagement! Keep working!

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