Can Inflation Be Your New Investment Strategy?

Is It Possible To Profit From Inflation?

InflationEver since the deviation from the gold standard back in 1973, inflation has been an ever present part of our lives.  Many of us are quick to remember back when gas was 25 cents a gallon, and when you could get a jug of milk for a dime.  Today, the local dime store is something of the past, even vending machines cannot be satisfied with mere pocket change.

For the consumer, inflation is terrible!  It means that your dollar doesn’t stretch nearly as far as it should to cover your gas, groceries and other necessities. Inflation is increasingly prevalent when you head to the grocery store and spend $100 on 4 bags of groceries.  However, for investors, inflation also offers an opportunity to be profitable.

How To Profit From Inflation? 

As an investor, inflation gives you the opportunity to select different kinds of investments that fare well in the face of inflation.  These include gold, silver, real estate, oil, and inflation-indexed stocks and bonds.  Here are the reasons why:

-Gold and silver have always been considered an important “hedge” against inflation.  Since gold has intrinsic value both as a currency and as a metal, it’s performs very well in the face of inflation.

-Real Estate:   Real estate offers excellent profit potential in the face of inflation because as the inflation goes up on a property its value goes up as well.  Therefore, you stand to make money by raising rent for any tenants, and or you can sell it for higher than you paid for it due to the rising prices.

-Oil, just like gold, moves in time with inflation.  Oil is a necessary part of our daily lives here in the U.S. and inflation or not, it will always be a hot commodity.

Make Sure Your Investment Keeps Up With Inflation

The important thing to keep in mind is whether or not your investment is able to keep up with rising inflation rates.  Low interest rate, low yield investments can actually cause you to lose money if the overall increase is not keeping up with inflation.  Therefore, in an inflationary environment, many low-risk, low-yield investments are a very poor investment choice.  One option that protects the safety of the principle while still keeping inflation in mind, are bonds that are inflation-indexed.  When the inflation index rises, these bonds rise in value as well.

Inflation May Be The Investment Opportunity You’ve Been Looking For

Rather than being fearful of what the future holds in regard to inflation, instead look ahead with confidence by getting yourself invested in inflation proof investments.  For more information on how to safe guard your portfolio against inflation, speak to a Redhawk Wealth Advisor near you today.

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