How do you invest in inflation?

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Sebastian

How do you invest in inflation?

Since its the onlyu thing going up historically over the years.

ryebrye

I guess by "only thing" you mean "only thing if you exclude the historic returns of the stock market, bonds, or any other kind of investment"

If you want to "invest in inflation" you have to bet that the value of the US dollar will decrease by investing in things in foreign money. Things like the Vanguard International Value fund perform very strongly when there is a downturn in the US economy, and have a strong upside even when there isn't a downturn. (Their returns average about 20% per year - which far outstrips the measly percent or two rate of inflation)

You can, of course lose money if you invest in anything. If you want to truly "invest in inflation" - you can invest in US Government Treasury bonds - which have a payout that is just about even with inflation and therefore do not lose money over time.

Thin Kaboudit

By buying commodities.

But your question contains a major flaw; the broader stock market has outperformed inflation for over 100 years! The actual inflation rate from January 1914 to today is 1,924.16%

The return of the Dow Jones Industrial Index for the same period is a little better, LOL! (see chart below)

Alex - California

The simplest and most highly leveraged way to hedge or invest in inflation has always been to purchase real estate. Historically in the past 30-70 years it has appreciated 5% nationally. Purchasing homes in safe neighborhoods with a good job pool and great schools is the way to go and can be a 2nd home or rental property as well.

StockJock

The best way to bet on inflation going higher is to buy Inflation Protected Securities (TIPS) from the US government. They are indexed to rise with inflation and do not suffer as inflation rises as most bonds do. Good luck!

Mack

Technically inflation is not going up over the years. I.e Annual inflation back in 1980 was over 10% (per year) but now it's only about 2.4%. The price of things is going up which is probably what you mean. Almost any asset you buy (like property, stocks, etc) will increase in value due to inflation. Even your regular salary will likely go up due to inflation so don't worry about it!
If you really want to directly "invest in inflation" you can to buy an inflation linked bond.

vegas_iwish

Stocks beat inflation easily but can buy TIP, an etf filled with inlfation indexed Treasury bonds, if you want direct inflation protection. Need to understand the idea behind this question is wrong 1st, though.

Mike J

There are ETFs that allow you to hedge against inflation. You can also invest in gold. There is an ETF for that, too. See the resource for specific strategies.

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