Hedges against inflation?

Question

The government continues to lie about the actual rate of inflation a typical consumer is experiencing. Money in a savings account is losing value much faster than the interest it earns.

What are some hedges against inflation other than precious metals and real estate? Does anyone know of a list of hedges, anything that will appreciate faster than inflation.

Answer 1

There are not too many assets that protect against inflation. Precious metals and real estate are the only things that i can think of. You need to find something that will always hold its value and is not tied to cash.  But there are many things that might be better to own than money.... since the inflation ration rates are much higher than the intrest rates you can buy somthing high quality and small in size like a high end watch and that might hold its own value. this is just my thoughts

Answer 2

The stock market historically always beats out inflation.  Yes, right now the market is beat down a little bit, but it always comes back (even the great depression ended).  Get a few books on investing, and if you are uncomfortable with stocks, at least start putting away some of your money in Treasury bills.

If you are not willing to risk the stock market, you could buy an ETF like TIP which just holds Treasury-inflation protected securities.  They are backed by the U.S. government, and the current yield is 5.58%.  You can buy ETF through any broker, and I prefer to buy through discount online brokers.  E-mail me if you want more specific information about that.

Or you could go talk to a financial advisor at any major brokerage, and shop around until you find one you like, and begin investing through them.

Answer 3

My dad said "It is better to be a Debtor rather than a Creditor during inflation". Buy precious metals/real estate etc, I know it is hard to encourage anyone into real estate investing at this moment. However, your obligations stay the same and values of your assets increase owing to devalued currency

Answer 4

benson

Answer 5

The best hedge against inflation is growth -- that is growth that at least general accounts for inflation a part of a more complex formula.  The best proxy for growth is the economy and the the best proxy for the economy is a diversified stock index.  

Also, don't forget about your own income:  an annual income that grows at a rate faster than inflation is an excellent hedge for protecting you purchasing power.

Finally, you may consider TIPS bonds, both domestic and international.

Answer 6

Index linked bonds (Gilts), Gold

Answer 7

I put up hedges against inflation but the darn hedge hogs keep sneaking  under it and started eating my money! :o(