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February 28, 2010 at 07:00 PM
When inflation starts to happen, assets like gold, silver and other materials do well. The National Inflation Association believes that silver will be one of the best investments for the coming decade. However, most advisors don’t recommend owning metal. They favor investing in the mining stocks of those metals. I agree and have seen it work for many of my clients.
Another strategy for offsetting inflation’s impact is purchasing commodity, energy and real estate mutual funds and ETFs, domestically and internationally. They do well because as inflation impacts the economy, these investments will rise. This allows you to at least keep pace with inflation.
Built-in inflation protection
When inflation rises, values of traditional bonds decline. Treasury inflation-protected securities adjust the principal of the bond to make up for the loss of purchasing power to inflation. Emerging-markets bonds also do well in an inflationary climate because their currencies increase when the value of our dollar declines.
The above products can be purchased in ETFs, mutual funds or variable insurance products. Expert management provides the knowledge and expertise we lack concerning these investments.
