As high inflation continues, concerns are growing larger and larger. It’s easy to see why. It seems like with every trip to pick up groceries or to fill up on gas, prices are increasing higher and higher, and budgets are being stretched thinner and thinner, with no relief in sight.
Many are worrying about their investments and retirement savings, as rising costs are eating into investment gains. For those who have investments in low-interest bonds or GICs, there’s a concern of losing money in the long run, primarily if inflation outpaces the interest rates on them.
There are always risks with any investment, but if you’re looking to prevent losses to inflation, you may need to choose other assets to avoid further losses to inflation. Read on to learn more about the top investments when you’re worried about your savings and the effect inflation will have on them.
Silver and Gold
One of the key benefits of investing in gold and silver is their long-term wealth preservation. They don’t generate interest or produce anything new, but bullion has a historical record of keeping up with inflation.
Silver and gold provide safety and security, which is another reason why it’s so appealing in a long-term wealth preservation strategy. There is variation in the year-over-year performance of bullion against inflation, but the fact that gold has maintained its purchasing power over hundreds of years when compared to many common goods is generally accepted.
Getting started buying bullion in Canada is a straightforward process. Simply find a reputable dealer to work with and choose whether you prefer coins or bars. As for deciding between gold and silver, both are strong hedges against inflation, so it comes down to a personal choice. Silver typically sees greater price fluctuations than gold, but a higher industrial demand exists.
Regardless of which precious metal you choose to invest in, bullion is a great asset to include when building a defensive strategy.
Consider Real Estate
Real estate is an important asset to consider when looking to protect against inflation. Commodities and land are hard assets and tend to benefit during periods of high inflation. Land is a finite resource and tends to increase in value as the value of the currency decreases.
However, it’s important to remember the significant capital cost that goes hand in hand with real estate investing. Additionally, while housing prices have dropped, they likely still have a way to go, and economists are expecting real estate markets to crash by spring.
Invest in Specific Companies
With so much uncertainty, there can be fear in investing in stocks, but another strategy for protecting against inflation is investing in companies that see profits grow faster than inflation and that are able to pass on costs of inflation to their customers. These are companies where there isn’t likely to be many fluctuations in demand, like for groceries and gas. As much as customers may complain about their prices, there is little choice but to go along with them.