In this video, we discuss 5 assets to invest in during high inflation.

Use Interactive Brokers to buy U.S and international stocks 👇

Use Rakuten Trade to buy Malaysian stocks 👇

Use StashAway to invest on auto-pilot 👇

Use Luno to buy crypto 👇
(Use code Y5SZ8B)

THE BEST INVESTMENTS TO MAKE DURING HIGH INFLATION:

1. Real Estate or REITs

When people have more money, they wanna buy property. When more people wanna buy property, prices go to the moon. Also, consider this from a loan or mortgage point of view.

Let’s say I buy a house that’s worth RM1m and pay RM5k/month. Today, that’s still a lot of money. As inflation is high, the value of 5k/month now may be high but in the future, its lower because inflation devalues our currency.

An alternative to invest in real estate are REITS. Just like the value of our houses will increase, the value of the real estate held by REITS will also go up in price. This means we should see capital appreciation and also get sweet dividends!

A REIT ETF called VNQ is already up 33% YTD, but its still going strong. However, I wouldn’t recommend buying U.S REITS for Malaysians or Singaporeans because the dividends, which can be quite substantial at around 5%, will be subject to a withholding tax of 30%.

This means that if they give a dividend of 5%, what we receive will only be roughly 3.5%. So, we’re better off buying Malaysian REITS through brokers like RakutenTrade.

2. Commodities

The most common commodity is gold. People always say that their investment in gold is an inflation hedge, and it is true. There isn’t any real way I can explain this, other than people just wanting to hold gold when fiat currencies devalue.

Some researchers have found that gold may not be a good inflation hedge after all, so I prefer other commodities like Oil or even stuff like Uranium & agricultural products like corn.

ETF’s like the XOP for oil is up a massive 82% YTD, Uranium ETF URA is up 95%, and even a CORN etf is up 38%! These all far outpace the S&P 500, which is at 27%.

Out of all of these, I’d probably invest towards the agriculture side in an ETF like DBA. Instead of just corn, they also have exposure to other commodities like wheat, soy, sugar, and coffee.

3. Crypto

This works a bit like gold. The price of crypto like Bitcoin could go up just because people deem it a better store of value than fiat currency. This is happening regardless, but inflation could just speed up the process.

People did think that bitcoin can be a stock hedge, but in March 2020 when all stocks fell, bitcoin fell too. This is mostly in theory, and I’m definitely not gonna buy more crypto just because inflation is high.

4. Stocks

I’ll be holding most of my current stock investments and won’t be trimming at all. When investing in stocks though, companies that have strong pricing power will usually fare the best.

This means that they can increase the price of their products and people would still buy them. The common industry for this is consumer staples, and include companies like P&G & Walmart.

Just because they raise prices, we still have to buy necessities like soap, groceries, etc. Because of this, they can usually hold up profits even when their costs increase due to inflation. On the other hand, companies like Nike that sells discretionary products may suffer a bit.

If it costs them more to make shoes and want to increase selling prices, people may not wanna buy it. Other companies that could suffer are growth stocks that don’t currently make money because their profits are all in the future which are valued less due to inflation.

Having said all of this, I most likely wouldn’t be shifting my stock portfolio allocation at this point. A boomer portfolio is probably perfect for times like these, but I’ll be sticking to my guns for now.

5. Cash

The main chunk of my portfolio will remain in stocks and in particular – growth stocks. Since I know that growth stocks could take a beating soon, I could hold cash to buy the dip if or when it comes.

However, this is a bit contradictory because inflation eats away at the value of our cash, so I’d try to put it into some higher yielding assets like StashAway Simple or Versa.

Hey! Thanks for reading the description. We can’t fit everything in here, so make sure to watch the whole video to find out more 🙂

⌚ Timecodes:

00:00 – How To Invest During Inflation (5 BEST Assets)
1:09 – Real estate
2:45 – REITs
4:27 – Commodities
6:13 – Cryptocurrencies
7:40 – Stocks
10:14 – Cash

Follow us on Instagram:

Tell us in the comments if you liked this video and what other kinds of videos you would like to see.

Disclaimers:

Music: Bensound.com

#TheMillennialFinance…(read more)

LEARN ABOUT: Investing During Inflation

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing