Inflation has been hitting all time highs and doesn’t look likely to go away any time soon. Keeping money in cash all but ensures that you’ll lose buying power. What can you invest in that beats or at least keeps pace with high inflation?

In this video, I break down the challenges with holding too much cash or bonds and the different assets that can be added to a portfolio that historically do well when inflation is high.

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LEARN ABOUT: Investing During Inflation

REVEALED: Best Investment During Inflation

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Inflation is the increase in prices of goods and services over time. It erodes the purchasing power of money, leaving consumers with less real value for their earnings. Inflationary times can be challenging for investors, as traditional investment options may not keep up with rising prices. However, there are certain assets that historically perform well during inflationary periods.

One of the best assets to combat inflation is real estate. Real estate tends to appreciate in value over time, often outpacing inflation. Additionally, rental income from real estate can provide a steady stream of cash flow, which can be especially valuable during inflationary times. Real estate investment trusts (REITs) are also a popular option for investors looking to add real estate exposure to their portfolios.

Another asset that tends to perform well during inflationary periods is commodities. These include precious metals like gold and silver, as well as other raw materials such as oil, natural gas, and agricultural products. Commodities have intrinsic value and can act as a hedge against inflation, as their prices typically rise in tandem with increasing prices.

Stocks are another asset class that can help investors combat inflation. While not all stocks perform well during inflationary times, certain sectors such as energy, materials, and consumer staples tend to do better. These sectors offer products and services that are essential and in demand, making them more resistant to the effects of inflation.

Additionally, inflation-indexed bonds, also known as TIPS (Treasury Inflation-Protected Securities), are a specific type of bond that is designed to provide a hedge against inflation. These bonds are tied to the Consumer Price Index (CPI), which means that the principal value of the bond increases with inflation, providing investors with a built-in protection against rising prices.

Cryptocurrencies, such as Bitcoin, have also gained attention as a potential hedge against inflation. While the value of cryptocurrencies can be volatile, some investors view them as an alternative store of value that is not tied to traditional financial markets.

When considering investments in inflationary times, it’s important for investors to diversify their portfolios to mitigate risk. By owning a mix of assets that have historically performed well in inflationary environments, investors can enhance the resilience of their portfolios and potentially offset the negative effects of rising prices.

In conclusion, investing in inflationary times requires a strategic approach that takes into account the potential impact of rising prices on investment returns. By incorporating assets such as real estate, commodities, stocks, inflation-indexed bonds, and cryptocurrencies, investors can position themselves to navigate inflationary environments and potentially benefit from the assets that tend to perform well during these periods. As with any investment strategy, it’s important for investors to conduct thorough research and consult with a financial advisor to determine the best approach for their individual circumstances.