Inflation is coming. It might be next year or the following year but it’s coming. You “get ready” for inflation by moving money into assets that increase in nominal value as the currency inflates.
Assets that have proven successful in protecting wealth from the ravages of inflation in the past include:
• Gold (and silver) – bullion, coins, jewelry, ETF’s, mutual funds and gold mining stocks; I invest in a precious metals mutual fund.
• Oil (and natural gas and coal) – ETF’s and mutual funds, and the common shares of refinery, exploration, oil service, integrated oil companies, limited partnerships, and royalty trusts; I invest in the common shares of exploration, integrated oil companies, and partnerships. The key for me is consistent and growing dividends.
• TIPS (Treasury Inflation Protected Securities) – bonds, ETF’s, and mutual funds; I invest in a TIPS mutual fund.
• Consumer Staples – ETF’s and common shares; I invest in the common shares of consumer staples companies with consistent and growing dividends.
• Commodities (agricultural products and minerals) – ETF’s mutual funds, and common shares; I invest in the common shares of one mining company.
There are other ways to hedge against inflation. The important thing is to choose a strategy you believe in that that fits your personal risk tolerance.
But remember, inflation is coming – get ready.
Links to the Inflation Protection Special Report
Part 1 - The Need
Part 2 - Gold
Part 3 - Oil
Part 4 -TIPS
Part 5 - Consumer Staples
Part 6 - Commodities
Part 7 - Summary