How to Approach Inflation 2023

Vernon C. Sumnicht CEO / CIO |

According to Allianz Life survey, “The vast majority (82%) of Americans say they are worried about rising inflation continuing to have a negative impact on the purchasing power of their income in the next six months.”
Inflation can be hedged through investments in assets that tend to hold their value or increase in value when the cost of goods and services rise. These include:

  • Treasury Inflation-Protected Securities (TIPS): TIPS are bonds issued by the U.S. government that provide protection against inflation. The principal value of TIPS increases with inflation.
  • Real Estate: Real estate can serve as a hedge against inflation as the value of properties may increase in response to rising prices and higher demand.
  • Commodities: Commodities such as precious metals (e.g., gold, silver), energy products (e.g., oil, natural gas), and industrial metals (e.g., copper, aluminum) may benefit from inflation as their prices may increase due to higher demand and supply constraints.
  • Stocks: Stocks of companies that operate in industries that are less sensitive to inflation (e.g., consumer staples, healthcare) can provide some protection against inflation.

It is important to note that no investment is a perfect hedge against inflation and the best approach is to diversify investments across multiple asset classes as we do in iSectors® Inflation Protection Allocation. Additionally, past performance is not a guarantee of future results, and all investments carry risks. (2023 Press Releases), Majority of Americans are More Concerned About Paying Bills Right Now Than Financial Future