Hedge Against Inflation

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 ?
Gold, often favoured as a hedge against inflation which can be a by-product of stimulus programmes, was near a three-year low at $1,227.59 an ounce after its recent sell-off.
The analysis also concluded that commodities can act as a hedge against inflation and provide diversification in a properly designed strategy for those investing in traditional securities portfolios such as stocks and bonds.
Gold has historically been an excellent hedge against inflation.
People see gold as a hedge against inflation as the country's tightening monetary policy drives investors from stocks and properties to gold.
Commodities have reached the highest since 2008, partly on demand for a hedge against inflation. Gold and silver have rallied amid sovereign-debt concerns in the U.S.
There is no "silver bullet" in the investment world that can provide a perfect hedge against inflation.
Analysts said that although rising commodity prices in the international markets remained a threat to the fragile economy of the country, stocks likely to benefit from this had been accepted as a likely hedge against inflation by the investors.
This in conjunction with the nation's desire to own property, the fact that property is historically a good hedge against inflation and the fact that many are looking at an alternative to their pension for retirement income, means the likelihood of a buy-to-let resurgence is high."
Oil had been on a six-year rally driven by surging demand from emerging economies like China, with additional support coming this year as investors rushed into oil as a hedge against inflation and the weak dollar.
Gold's allure as a hedge against inflation and a safe-haven asset got a boost as oil leapt to a lifetime high of $100 a barrel on Wednesday and the dollar tumbled.
dollar fell to a record low against a basket of major currencies as expectations for more aggressive Federal Reserve interest rate cuts encouraged funds to pour money into commodities to hedge against inflation. A combination of a weak U.S.
Commodity markets are persistently drawing funds as investors are seeking a hedge against inflation amid the dollar's steep falls, which make oil and other commodities more attractive to non-U.S.