It’s no longer 1978, when gas was an insane $0.63 per gallon! Inflation is on everyone’s mind right now, so I thought I'd share 5 ways to combat it:
✔️ TIPS: The principal of Treasury Inflation-Protected Securities increases with inflation and decreases with deflation. When a TIPS matures, you are paid the adjusted principal or original principal, whichever is greater.
✔️ Precious Metals Funds: The price of gold tends to increase during inflationary periods as the purchasing power of the dollar decreases. There are numerous precious metals funds that invest in gold, silver, platinum, and palladium.
✔️ Commodity Mutual Funds: Broadly speaking, the price of commodities tends to increase during periods of inflation. There are many mutual funds that invest in agricultural and energy commodities that can potentially benefit.
✔️ Equities / Equity Mutual Funds: Companies that are in inflationary-sensitive sectors like industrials and materials can potentially benefit in a higher inflation environment. There are specialty mutual funds that offer underlying equities within the fund’s portfolio.
✔️ Real Estate / REITs: Real Estate rentals and values tend to increase when prices do. REITs have attractive dividends that, according to Nareit, have outpaced inflation as measured by the Consumer Price Index in all but two of the last twenty years.
Feel free to share these tips with your friends and family! We could all use help riding out inflation.
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