When consumer prices rise, cash and nominal bonds lose purchasing power. Inflation hedges are assets that tend to hold or gain real value when inflation runs hot—but no single investment is a perfect shield.
TIPS and I-Bonds
US Treasury Inflation-Protected Securities (TIPS) and Series I savings bonds adjust with inflation measures. They work best as part of a diversified bond allocation, not as an all-in bet.
Real Assets
Real estate (direct ownership or REITs) and commodities (gold, broad commodity funds) have historically helped some investors during inflationary periods. They also add volatility—size positions to your risk tolerance.
Stocks and Dividends
Equities are not a direct inflation hedge, but many companies can pass costs through over time. A low-cost global stock index remains core for long-term growth.
Conclusion
Combine TIPS or I-bonds for inflation-linked income, real assets for diversification, and equities for growth. Rebalance yearly and keep fees low.