When inflation occurs, economic prices rise and the purchasing power of your currency decreases. Although a small amount of inflation can be healthy, it can become risky when it surges further. When this happens, not only will it affect the cost of your daily spending but also your investments and savings.
You can manage your finances better by knowing the best investments during hyperinflation. Here are some of them:
- Commodities
Tangible assets such as oil and other agricultural products are one of the best investments during inflation. This is because their value typically goes up along with the rise in prices. Gold and other precious metals are also good options because of their intrinsic worth, making them long well-known as an inflation hedge.
- Stocks
Another reasonable choice in keeping up with inflation is stocks. With the increase in prices, company profits tend to spike up, which creates higher share prices. If you’re planning on getting stocks, it’s important to choose the right market or company that can perform well, such as technology or the consumer sector.
- Treasury Inflation-Protected Securities (TIPS)
TIPS are government bonds indexed to the fluctuation of prices. This means that their interest rates rise with inflation and fall when there is deflation. Because of this, they can provide fewer risks and add more stability to your portfolio. Since this kind of investment is backed by the government, it’s also one of the safest investments you can make.
- Real Estate Investing
in real estate is an excellent way to hedge your investments against hyperinflation. The rising prices not only increase the value of your property over time but also continue to generate rental income on pace with inflation. You can choose direct ownership or securities, such as real estate investment trusts (REITs).
Reach Out to a Financial Expert
Since the economy can be unpredictable, knowing the best investments during hyperinflation can help you make better financial decisions. If you are still unsure of what steps to take, it’s better to get in touch with a financial expert. Contact us at Lamkin Wealth Management to learn more about investments and financial planning.