Hedge Against Inflation

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Hedge Against Inflation

To take steps to limit the reduction of the value of an investment due to inflation. Inflation decreases the value of money such that an investment's return is not worth as much as it might have been when the investment was made originally. Hedging against inflation helps reduce this pressure. Examples of hedging against inflation include buying commodities such as gold or purchasing an inflation-protected security, in which the return is linked to the inflation rate. See also: Real Rate of Return.
References in periodicals archive ?
8226; Hedging Against Inflation - Seventy-six percent of high net worth investors are concerned about inflation as it impacts their portfolios.
The above results indicate the differing degree of inflation-hedging by different countries, particularly the degree of hedging against inflation is stronger in advanced markets compared to emerging markets.
Thirdly, a comparison of the long-run inflation-hedging effectiveness of real estate stocks in developed and emerging markets find that the degree of hedging against inflation is much stronger in developed markets.
They value gold for its role in preserving wealth and hedging against inflation over the long term," the World Gold Council said.
ANITA ROBERTSON, financial consultant, Private Client Group, Merrill Lynch, Los Angeles, 800-456-8790, shares her thoughts on structuring a portfolio for clients interested in hedging against inflation.
Inflation causes people to invest scarce resources in activities that have the sole purpose of hedging against inflation.
Therefore SKD Frankfurt recommends to knock measures off to reduce the personal tax burden and hedging against inflation at the same time.