Assets that tend to perform well during inflation include real estate, commodities (energy, metals), TIPS (Treasury Inflation-Protected Securities), and equities with pricing power. These assets offer protection by rising in value as costs increase, helping to preserve purchasing power.
Read on for 7 investments to consider if you're seeking inflation protection.
The money you deposit in a share certificate grows over a fixed term, often at an even higher rate than a savings account. Keeping your money in savings and share certificate accounts is a wise place to start in protecting yourself from inflation.
At the household level, that usually means older wealthy families who hold lots of bonds and cash lose when inflation is high, while many younger middle-class families gain because inflation shrinks their fixed-rate mortgage debt.
Equities historically offer positive real returns and outperform other asset classes, making them suitable for inflationary periods. Gold is a reliable hedge against inflation and provides liquidity while mitigating volatility in other investments.
The following asset categories are deemed few of the best options for investors aiming to build a portfolio that beats inflation in the long run:
Investors profit during inflation because consumers rely on these raw material essentials. While producers pass on the cost to consumers, it creates a hedge against inflation, protecting the value of their investments.
Big-ticket purchases: Negotiate all large purchases, such as large electronics and major appliances. In a time of inflation, avoid as many of these purchases as you can.
The 7-3-2 rule is a financial strategy for wealth building, suggesting it takes 7 years to save your first major financial goal (like a crore), then accelerating to achieve the next goal in 3 years, and the third goal in just 2 years, leveraging compounding and disciplined, increased investments (like a 10% annual SIP hike). It highlights how returns compound faster over time, drastically reducing the time needed for subsequent wealth targets, emphasizing patience and consistent, growing contributions.
Bulk purchases: Non-perishable items, such as rice, pasta and canned goods, often come with a lower per-unit cost when bought in larger quantities. Just remember that everything — even long-lasting foods — have expiration dates, so it's best to plan accordingly.
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“Whatever abilities you have can't be taken away from you,” Buffett said at the 2022 Berkshire Hathaway annual shareholders' meeting. “They can't be inflated away from you. The best investment by far is anything that develops yourself, and it's not taxed at all (5).”
Some of the worst investments during high inflation are retail, technology, and durable goods because spending in these areas tends to drop.
Those who hold assets — property, stocks, commodities — benefit most from inflation. Wages historically lag behind prices, eroding middle-class purchasing power. The “Cantillon Effect” explains how new money benefits the wealthy first.
They run out of cash as people stop making deposits. There are two winners in hyperinflation. The first beneficiaries are those who took out loans and find that the collapsing value of the currency makes their debt worthless by Page 3 comparison until it is virtually wiped out.
$500,000 in 1965 has the same buying power as approximately $5.14 million today (2026), meaning inflation has increased its value over 900% due to an average annual inflation rate of around 3.9% over the last 61 years, according to the Bureau of Labor Statistics consumer price index.
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