Wednesday, 14 August 2024 03:56

Don’t Ease Off Inflation Concerns Yet

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Investors remain concerned about how inflation could affect their portfolios. Despite the Federal Reserve's efforts, inflation remains elevated, making it a good time to consider adding inflation hedges to your investments. Here are three top inflation hedges to protect your portfolio:

 

  1. TIPS (Treasury Inflation-Protected Securities): These U.S. government bonds adjust their interest rates with inflation, providing a reliable safeguard for bond investments.

 

  1. Floating-rate bonds: These bonds adjust their payouts with rising interest rates, offering protection against inflation. You can access them through ETFs or mutual funds for added diversification.

 

  1. Real estate: Investing in a house with a fixed-rate mortgage can hedge against inflation. If a house directly isn’t possible SFR or REITs are great options. 

 

Avoid long-term fixed-rate bonds and cash savings as they lose value in real terms during high inflation.


Finsum: Inflation still remains above the official Fed target and with a potential slew of cuts coming, inflation could spark again. 

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