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 ?
Private farmland ownership is an excellent choice for investors seeking to diversify, hedge against inflation, and anchor their portfolio," added Farris.
These assets not only raised their standard of living but also gave them hedge against inflation.
Investors pay close attention to the quarterly filings by Paulson and other notable hedge fund managers because they provide the best insight into whether so-called smart money sentiment has changed toward gold as a hedge against inflation and economic uncertainty.
There is only one proven hedge against inflation and that is a strong currency.
Although many central banks have dedicated to provide a low inflation environment, investors, particularly long-term investors would prefer an asset that provides a complete hedge against inflation.
Federal Reserve Chief Janet Yellen suggested interest rates could rise sooner than many had expected, denting bullion's appeal as a hedge against inflation.
This lead to the gold price surging further as investors turn to gold in attempts to hedge against inflation, economic turmoil and political unrest.
Indians also buy gold in the form of jewellery, bars and coins as a hedge against inflation.
The first annual fall of gold prices was in 2013, which is the first time since the last 13 years, whereas some investors lost confidence in the yellow metal as a tool to hedge against inflation, besides being affected by increasing the interest rates by the US Federal Bank during the last period, the report explained.
We believe the funds are attractive for investors concerned with rising prices of goods as commodities provide an effective hedge against inflation.
Talking to President IWCCI Farida Rashid, he said that the demand for dollar is set to increase leading to dollarization of the economy where people keep their savings in dollars as hedge against inflation while use local currency for daily expenditure only.
Fed Chairman Ben Bernanke said last week that a highly accommodative policy was needed for the foreseeable future, bolstering bullion which is often seen as a hedge against inflation.