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High inflation is the big economic story right now, as it should be. With inflation rising at its fastest pace in decades in many countries worldwide, investors are searching for alternative assets that can offer new opportunities for growth and help them avoid the worst effects of inflation.
There are a lot of asset classes beyond the usual stocks and bonds, but because they’re not as commonly included in the average portfolio, many still have a lot to learn about them.
Gold and Silver Bullion: A Hedge Against Inflation
While you may think of jewellery first when you think of gold and silver, they are referred to as bullion when they are sold in their highest-purity forms. Gold and silver bullion usually come as coins and bars, and they are investment-grade assets.
Bullion is frequently used as an inflation hedge that can help investors weather times like these. However, bullion is also a uniquely tangible asset that you can buy and hold in your home or in a safety deposit box.
The best place to buy bullion is a reputable bullion dealer that offers all of the mainstays of bullion investing, including coins made by national mints like the Canadian Gold Maple Leaf or the American Gold Eagle.
Agricultural ETFs: Ride Rising Prices
Grocery prices are rising around the world due to supply chain issues, pandemic disruptions, and the war in Ukraine (one of the world’s largest producers of wheat).
Some investors are turning to agricultural ETFs to ride those rising prices. An ETF is an Exchange-Traded Fund, similar to a mutual fund but one that’s freely traded on stock exchanges. The funds invest in such a way that they match the price of a target asset. In some cases, it might be an index like the S&P 500, but there are also ETFs that target commodities, like oil and agricultural products.
NFTs: Are They Still a Good Idea?
It may seem like the NFT bubble has burst, with daily transactions dropping 92% since September 2021. Interest from buyers has cratered, but is this just a dip? If a recovery is expected, it could be a smart time to buy. For all the skeptics, it was still an industry that saw $17 billion in transactions in 2021.
The risk with NFTs is the wide array of options. It’s even in the name: one NFT is not like another. This is an asset that has far more to do with art speculation than cryptocurrency. Whenever you invest, it’s important to know what you’re investing in.
Real Estate: Think Long-Term
With interest rates rapidly rising to combat inflation, real estate is out of reach for many, but it’s another asset that has historically helped investors beat inflation. If buying a first or second property is out of your reach, you can always look toward REITs as a way of putting your money alongside institutional investors to take advantage of the power of real estate as an asset.
There are assets out there that can help you tackle inflation. Think outside the stock market and bonds and do more research about these alternative assets.