The rise in prices of the products that we can’t make our living without affects our life incredibly. Inflation has its pros and cons for individuals as well as for the entire nation. While the economic growth generated with the emergence of inflation benefit the country in many ways, it is hard to resist the influence of its disadvantages. Yes, inflation can leave you in dire straits. Fortunately, along with real-estate and bullion gold bars, there are certain ways to protect against inflation. Let’s explore them below!
Short-term bonds are a preferred option than a long-term bond to match the increased cost of living. Let’s say, you buy a bond of 4 years during which you receive a fixed income of an amount i.e. $5000. The bond matures after 4 years and then you invest in new a bond that offers a higher interest rate. It is noticeable that the interest rate will be surged as per the increased inflation rate.
Short-term bonds are a great way to get a fixed income that satisfies a proliferated cost of living.
The rates of real-estate almost always increase in line with inflationary trends. Since 1970, we have seen a considerable hike in the prices of the real-estate. Of course, there are blips as well along the way but the rates go mostly in parallel with the rate of inflation. Thus, investing in real estate can be a phenomenal hedge against inflation.
Gold costs have been increasing since the days immemorial. Gold is a commodity and when commodity-driven inflation encounters the economy, the prices of commodities are likely to move on as well. Hence, adding gold in the form of gold bars, jewelry or other ingots to your investment portfolio can help you reap great returns during inflation.
These are the ones of the most productive options and act as a hedge against inflation. Undoubtedly, there are other ways too such as stocks, ETFs and securities. It depends on which options suit from person to person.