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Inflation is a sneaky pickpocket that drains your moneys value.
One day, your grocery bill looks normal.
The next, its a second rent payment.
Meanwhile, that solid 5% return on your investments shrinks to 2% once inflation takes its cut.
But not every investment crumbles under inflation.
Some remain strong while prices rise.
Treasury Inflation-Protected Securities (TIPS)
TIPS are government bonds designed to hedge against inflation.
They also pay interest twice a year, which offers a steady income.
Rising inflation expectations partly due to tariff concerns and economic slowdown fears have boosted demand for inflation-protected assets.
Since TIPS are tied to the official Consumer Price Index (CPI), they protect against general inflation.
Because landlords can raise rents in response to inflation, many REITs maintain strong returns.
They also pay out most of their profits as dividends, which provides investors with a steady income.
For example, recent data highlights the strength of utilities as a reliable dividend sector.
While dividend-paying stocks help generate steady income, they shouldnt be the only hedge against inflation.
Instead, they work best alongside other inflation-resistant assets as part of a diversified portfolio.
Additionally, energy and commodity stocks often perform well when raw materials become more expensive.
However, commodities are volatile, and their prices can swing due to supply and demand shifts.
They work best as a small part of a diversified portfolio rather than a primary investment.
Rental Properties
Owning rental properties offers a tangible way to beat inflation.
However, real estate isnt passive consideringmaintenance, vacancies and property managementcan cut into profits.
Inflation can erode wealth, but smart investing can help protect your money.
TIPS, REITs, dividend stocks, commodities and rental properties have historically been strong inflation hedges.
While no single asset is perfect, a diversified portfolio combining multiple strategies can help investors maintain purchasing power.
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