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3 Proven Ways to Inflation-Proof Your Investment Portfolio

Inflation hit a 39-year high of 7% in 2021, causing many people to lose a ton of money.

Unfortunately, few people know how to make safe investments during inflation. Yet, knowing how to can help you protect your portfolio. If you make the right investments, you can even profit from inflation.

To help you get started, we’ll go over several common inflation-safe investments that the wealthiest people make. In no time, you can start earning money from the current inflation that the US is seeing.

Here are 3 ways to inflation-proof your portfolio.

1. Buy Precious Metals

One of the best ways to protect your portfolio from inflation is to buy precious metals. While gold and other metals are not impervious to declines in value, precious metals tend to recover. Because of this, you can expect to invest in them and eventually profit, providing you hold on to them until they bounce back.

When investing in precious metals, you should get various kinds. Certain metals can change in value while others remain unaffected, so having different ones will prevent you from losing too much at once.

You can also buy different types of metal products. For example, you can buy gold coins online, but you can also get gold bullions and jewelry. Should you decide to sell them, you can provide customers with different kinds of deals.

2. Invest in Real Estate

Another inflation-proof investment is real estate. Like most investments, real estate will decline often. However, housing and commercial properties are always in demand, and their values increase as more people buy them.

Many people gain some experience with real estate when they buy their first homes, but you should go beyond this. Consider buying another property to rent out. This would not only help you maintain a diverse portfolio, but you can also earn passive income.

3. Make Short-Term Trades

If you’re looking to make safe investments during inflation, you can’t overlook the stock market. Anyone that dabbles with stocks knows that their values fluctuate constantly. Yet, the S&P 500, which represents the 500 largest US companies, has consistently gone up since its creation, with only a few drops.

To avoid losing money during these drops, try to invest in something as it’s increasing in value. As soon as you notice a decrease, sell and look for something else.

You can also profit from inflation by investing in call options. When you buy a call option, you’re essentially betting that a stock will increase by a certain date. These are extremely risky, but the payout can be huge if you get one right.

Use These Inflation Safe Investments Today

Now that you’ve read this article, we encourage you to start thinking about the inflation-safe investments you’ll make. Keep in mind that the more you diversify your portfolio, the easier it’ll be to avoid hefty losses. Making safe investments for inflation is all about due diligence.

For more investing advice, take a look at our other articles.

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