Strategic Approaches for Investing During Periods of High Inflation

by | Jun 17, 2023 | Invest During Inflation | 15 comments




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The ultimate guide to inflation:
Best hedge against inflation:

Inflation has been on an absolute tear over the past year. I’d normally respond with a “who cares” comment, but if this thing keeps going at its current rate then your money will lose it’s value a lot faster than it has in the recent past.

So what can you do about it?

In this video, we’ll look at actual data to determine the best place to park your money to protect it from inflation as much as possible.

Warren Buffett has been around for a long time and he’s seen pretty much every market condition you can think of so we’ll hear from him on what he thinks you should do with your money when inflation is on the rise, as well.

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Since Bitcoin is always a hot topic we’ll also take a look at if that asset class is as good as an inflation hedge as a lot of the Bitcoin bulls say it is.

Inflation is of course when the cost of things we purchase increases over time. I think we all understand that a cup of coffee today is more expensive than it was 20 years ago…or $100 today buys you less than it did 20 years ago.

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Disclaimer: This video is for entertainment purposes only. Everyone’s situation is different so do your own research before making any decisions with your money. If you need help then contact a Certified Financial Fiduciary before trying anything that is mentioned in this video. I prefer a Fiduciary financial advisor that charges an hourly fee as opposed to an ongoing fee based on a % of your portfolio. Always remember that incentives determine the type of advice they give you so one that charges an hourly fee is less likely to be problematic….(read more)


LEARN ABOUT: Investing During Inflation

REVEALED: Best Investment During Inflation

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How To Invest Money During High Inflation

Inflation is a term that strikes fear in the hearts of investors, causing them to be wary of where to allocate their hard-earned money. High inflation rates can significantly erode the value of money over time, making it crucial for investors to find ways to protect their wealth. However, in times of high inflation, there are still investment strategies that can help individuals maximize their returns and safeguard their investments. Here are some tips on how to invest money during high inflation.

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1. Invest in Real Assets: One of the most effective ways to combat inflation is by investing in real assets. These can include real estate, farmland, or commodities like gold and silver. Unlike traditional currency investments that can lose value due to inflation, real assets tend to retain or increase their value during inflationary periods. They provide a tangible store of value that can act as a hedge against rising prices.

2. Diversify Your Portfolio: Diversification is always a prudent investment strategy, and it becomes even more critical during periods of high inflation. By spreading your investments across different asset classes, sectors, and geographic markets, you reduce the risk of being disproportionately affected by inflation in a particular area. Diversification helps ensure that even if one sector or asset suffers due to inflation, other areas of your portfolio can continue to perform well.

3. Consider Bonds and TIPS: While inflation can erode the value of bonds, there are certain types of fixed-income investments that can provide some protection. Treasury Inflation-Protected Securities (TIPS) are specifically designed to provide a return that adjusts with inflation. As their principal value increases with inflation, these bonds offer a reliable way to preserve purchasing power during high inflation. Other inflation-adjusted bonds or certain corporate bonds may also be worth considering, as they can provide relative stability during inflationary periods.

4. Invest in Equities: Historically, stocks have proven to be a good hedge against inflation in the long run. During times of high inflation, certain sectors, such as commodities, energy, and infrastructure, tend to perform well, as their revenues can increase along with rising prices. However, it is essential to carefully analyze individual stocks and invest in companies that have a track record of managing through inflationary periods successfully.

See also  Federal Reserve to scale back economic support as inflation rises

5. Look for High-Yielding Investments: Inflation erodes the purchasing power of cash over time, so investors should seek out investments that offer higher yields or income. Dividend-paying stocks, real estate investment trusts (REITs), or high-yield corporate bonds can provide a regular income stream that helps to offset the effects of inflation. However, it is crucial to conduct thorough research and choose investments with stable income streams and a history of maintaining dividend payments during inflationary periods.

6. Stay Informed: Keeping up with current economic news and trends is essential to make informed investment decisions during high inflation. Monitor inflation rates, study macroeconomic indicators, and stay updated on government policies that may impact prices. By staying well-informed, investors can adjust their investment strategy accordingly and take advantage of opportunities in various markets.

In conclusion, while high inflation can pose challenges for investors, there are effective strategies to invest money and protect wealth during these periods. Investing in real assets, diversifying your portfolio, considering bonds and TIPS, investing in equities, seeking high-yielding investments, and staying informed are key steps in navigating the investment landscape during high inflation. By implementing these strategies, investors can position themselves to preserve wealth and potentially achieve positive returns even in the face of inflationary pressures.

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15 Comments

  1. Jeanette York

    Inflation is a tax on savings. I therefore have nothing in savings right now, and all in investments. The only chance of growth lies in the market. I haven't changed my basic account structure, but have added monthly dividend ETFs. I use the dividends to feed no fee index funds, like FZROX and FNILX. The value of holdings now is the present value, growth or loss at the moment, but the great thing is still owning when the market adjusts and things look green across my holdings at least every other day. I have no interest in digital currency, since its value is not based on anything but opinions of its value. I invest in real companies, services and products that have weathered worse times than these. I also always remember, too, that I can't benefit from what I don't own.

  2. Matt Ball

    The boiling frog bit is actually not true. The point is taken, but frogs jump out before they cook

  3. Francisco Arias

    Man, you have the best YT channel about this topic.

  4. Modest Outlaw

    Really glad I found your channel! Love your videos

  5. The Londizzle

    Those "tin-foil hats" have been right about an awful lot lately.

  6. Carolyn Grizzel

    I am beating inflation… I just paid off my house!! wooohoo!

  7. Financial Rookie

    I was waiting to see if you were going to mention Bitcoin. I understand some may not be huge fans of it but I do believe in these times people should invest 5% -10% on it like you did. But what do I know.

  8. Steven

    Im 31 and do well for myself but how do I find a girl that’s on the same page with me financially. Dating is rough these days.

  9. The Engineered Feline

    Great video for the community. More people need to watch this!

  10. The Engineered Feline

    Just got a promotion at work by applying for an open position! Lots of work to get to this point

  11. Alex Hung

    "No children, that I know of." That's the same line I use LOL

  12. Nicole Ernst Boris

    Great video as usual thanks for sharing ☺️

  13. Todd D

    I was disappointed that you used the frog analogy. I know you’re not intentionally trying to promote or encourage something. But just mentioning that may encourage someone to try it. I wish you well.

  14. My way of FIRE

    Hey Jarred, I subscribed to the FI group in your last video and so far haven't received any confirmation, I tried just now once more, will be waiting for the email, regards

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