investing 2026-04-19
Inflation Hedging Strategies
How investors protect purchasing power when inflation runs above target.
Inflation erodes purchasing power. 3% inflation for 25 years cuts purchasing power roughly in half.
TIPS
Treasury Inflation-Protected Securities adjust principal by CPI. The yield quoted is real.
I Bonds
US savings bonds with fixed real rate plus inflation adjustment. $10k/year per person.
Real Estate
Rental income tends to rise with inflation. REITs offer liquid exposure.
Commodities
Oil, agriculture, industrial metals, gold. ETFs (DBC, PDBC) provide diversified exposure.
Stocks (selectively)
Companies with pricing power pass inflation through.
Gold
Long-debated. 5-10% allocation common.
What Doesn't Hedge
- Long-duration nominal bonds
- Cash above emergency-fund needs
- High-multiple unprofitable growth stocks
Sample Tilt
``
50% diversified stocks
20% TIPS / I Bonds
15% REITs and commodities
10% short-duration bonds
5% gold
``
Educational only. Not financial advice.