Gold, a traditional
inflation hedge, however, lost 5% in price since the election and silver fell almost 9%.
Analysts say inflation could breach the Fed's threshold of 2 per cent target next year, and that would cause investors to pour money in some
inflation hedge instruments.
Because some of these plans have added their
inflation hedge during a low inflation rate in the second part of 2014, and utilizing the interest rate hedge in the first quarter of 2015 as nominal rates rose they were able to obtain enticing general returns.
And with that current return comes an
inflation hedge, a good prospect of higher value, some modest tax shelter, and a potential estate-planning tool that may provide a step-up in asset value to heirs.
And since the introduction of index-linked government bonds, any merits it might have as an
inflation hedge have become less relevant.
Akin to buying homeowners insurance before a house fire starts, the value of owning an
inflation hedge is greatest before the price of the hedge goes up--that is, before an increase in the inflation rate.
REITs provide either no
inflation hedge or a perverse
inflation hedge in the short run.
Doing so provides an
inflation hedge and funding options should a long-term-care need arise, all while enjoying a reliable stream of income.
According to the firm, the fund seeks to deliver higher risk-adjusted returns than traditional long-only real estate strategies, while also potentially providing an
inflation hedge and a durable stream of income.
Traditionally, investors turn to gold in times of turmoil as an alternative store of wealth to equities and the dollar and as an
inflation hedge.
Unlike gold, which is regarded as an
inflation hedge and a safe haven in an uncertain economic environment, silver is extensively used in industrial production, which accounts for 46 per cent of total demand for the metal.
As a very high-profile safe haven, the price can rise at times of political uncertainty; as an
inflation hedge, it has performed well in reaction to quantitative easing.
