5 Best Investments During Inflation in 2024

The level of inflation skyrocketed in 2022 as our economy has suffered from various sources of turbulence. The pandemic, the climate crisis and the overall global relationships hold a big influence on the rise and fall of inflation.

No one could've imagined that the world would stop for a few years in 2020, and we'll have these consequences, so it's good to be always prepared!

There are a few things you can do to protect your money when inflation increases. Read on to find real advice for managing investments during inflation and learn how to take care of your money in 2024!

Inflation is essentially a rise in prices that translates through a decline in the buying power of money. It can be measured through the customer price index, or CPI for short.

CPI is a measure that indicates the average change in the prices paid for a market basket of goods and services. The rising prices indicate fewer goods in the basket for the same amount of cash, and that means money is losing its purchasing power.

CPI rises are an economic indicator of inflation and experts follow it closely. Also, it can show if the government's economic policies are working effectively.

The key to saving money during inflation is investing it in certain assets! Investing involves risk, but you can minimize it by creating a diversified portfolio across different asset classes.

Asset classes are groups of investments with similar characteristics, laws, and regulations. The most common asset classes include equities, fixed income, commodities, and real estate.

Diversifying your investments through all classes will help you protect your money if something unforeseeable happens to one of the groups.

Historically, the stock market has the best returns, but your savings bonds will suffer if the inflation rates go up. That's why diversification throughout a few asset classes is the best way to protect your money from high inflation.

Preparing for inflationary times can be challenging for beginners, so consulting a financial advisor on personal finance can be beneficial!

An expert can help you with your portfolio construction and real investment decisions. They can find investments with the best interest rates and risk tolerance.

If you already have an investment portfolio, a financial advisor can do a risk assessment for inflation. They'll help you fill out the gaps and suggest the best course of action moving forward.

Also, you can use online inflation calculators to see how the current inflation rate is affecting you and your assets!

If you want to protect your money during inflation, it's important to invest in assets from different classes. However, some investments are more resistant to inflation than others.

Read on to find the best economically secure investments in 2024. Learn how you can protect your money from rising inflation rates and secure your financial future!

Real estate is considered an inflation hedge – a great and safe option for investing even during high levels of inflation.

Typically, there are 2 main ways you can invest in real estate. The first option is to buy a property and list it for rent. Rental income is a great way to earn money passively, and even if the economy fluctuates, your money is secure.

The other option is to invest in real estate investment trusts (REITs). It's a way to invest in real estate without buying a physical property. REITs are companies that own and manage income-producing properties such as offices and malls.

Also, you can invest in both physical and REIT properties to increase your ordinary income safely. Consider including real estate in your investment portfolio and protect your money from economic turbulence in the future.

Equities are company shares bought in the stock market. They're rather safe investment options that can fight off inflation.

The most recommended equities for 2024 include consumer products, renewable energy, and financial companies.

Also, check out available shares in travel, leisure, and hospitality-related companies that are quickly recovering after the pandemic. Do some research on the safest stock options for you and your financial goals.

Talk to a financial planning expert to determine which equities are the best for your investment portfolio. Invest in company shares that can withstand an inflationary environment and add to the principal value!

Treasury inflation-protected securities (TIPS) are U.S. government-backed bonds that increase in value as the CPI rises. It's a safe investment that can easily withstand any inflation risk.

In 2021, the prices of these TIPS skyrocketed because of the forecast of inflation for the upcoming years. Now, it's rather a pricy investment, but it still can be very beneficial for investors to consider putting their money in TIPS.

Also, they tend to have lower interest rates, so they aren't the best choice if you think about long-term growth.

Invest in TIPS if you're worried about inflation rates and want to have a stable and secure option in your diversified portfolio.

Commodity investments are raw materials and agricultural products like natural gas, oil, grain, or even coffee and gold. Investors consider commodities one of the most powerful inflation hedges.

For example, gold holds its value pretty well even during inflation and can be a secure investment during uncertain times. You can purchase gold bars, coins, or jewelry and put them into a deposit box for safekeeping.

Commodity prices tend to be high, so you can consider buying stocks rather than raw materials. You can invest indirectly by buying shares in commodity companies, mutual funds, or exchange-traded funds.

It's not a perfect investment, but it can be a great addition if you're looking for ways to diversify your portfolio.

U.S. Treasury sells savings bonds directly to investors. They're a safe investment in times of economic turbulence because their value can't decline!

Look at savings bonds as a loan to the government. You'll get your money back (plus interest) at a predetermined time. Also, you get to watch the money you've put in grow in real time!

It's a great way for beginners to dip their toes into investing. It's a cheap and low-risk way to reach all your financial goals!

You'll have to wait at least 5 years before you can redeem your money with interest, but it's great if your goal is to save for retirement! Choose savings bonds if you're looking for something safe and simple to jumpstart your investing career.

All of these investing opportunities are great for investing during inflation, but there are more factors you should consider before investing.

Consider your age, personal financial goals, and risk tolerance before deciding to put all your savings into investments. For example, if you're close to retirement, it might be best to shift your focus to cash and fixed-income investments.

Also, if you're a beginner, you can find valuable information on managing finances during inflation on the most popular investing podcasts!

Consult a financial expert before starting your portfolio and diversify your investments. List out your priorities and have a clear savings goal ahead.

Create a diversified portfolio for your investments to make sure your money is protected even during inflation!

You can invest in real estate and REITs, equities, commodities, TIPS, and savings bonds. These investments can be the safest option during inflation.

Consult a financial expert before making any big financial decisions, or use online calculators to see how your current assets are affected by inflation!

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