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inflation hedge

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Inflation hedge
Investments designed to hedge against inflation and the loss of purchasing power associated with it.

inflation hedge
An investment with a value directly related to the level of general price changes. Among securities, the common stock of natural resource companies (such as gold, timber, and oil) is often considered an inflation hedge because the value of the companies' assets should rise during a period of inflation.


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However, no meaningful correction will be possible without a strong rebound in the US Dollar, whose sharp decline has been the dominant catalyst behind recent gains as traders look to crude as an inflation hedge.
Given all these headwinds, we would focus utilities exposure elsewhere; our preferred holdings in the sector remain National Grid (particularly as an inflation hedge, with both asset base growth and revenue growth positively linked to inflation) and Scottish & Southern Energy, which has a loyal and growing customer base and looks set to be a major beneficiary of the government's focus on wind power and nuclear.
Traditionally an inflation hedge, gold was sought by investors who had growing concerns about central bank's exit strategies and the implications of a reversal in quantitative easing measures, according to World Gold Council's latest Gold Investment Digest.
 
 
 
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