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What Asset Class Do Well as an Inflation Hedge?



5 Inflation Proof Assets You Should Know


It’s no secret that the price of goods and services is increasing. The higher rates can decrease what you can spend with your income, and it might lower the value of your investments over time. The good news is that having an inflation hedge for your investment portfolio is a smart way to maintain the purchasing power of your money and help some of your investments retain their value.


When you find an asset with a price that is expected to increase with inflation or offers a higher interest rate than inflation, this is inflation hedging.

If this is something you’re thinking about, here are 5 asset classes that do well as an inflation hedge. As always, Essencap is here to help you with your investing needs.

Here are 5 of the best assets that do well as an inflation hedge:


Here are 5 of the best assets that do well as an inflation hedge:


1. Fine Wine.

As a long-term investment, fine wine generally outperforms worldwide inflation because the price of wine isn’t tied to inflation. You can buy, sell, and store the bottles yourself by bidding on wine auctions around the world.


2. Commodities.

These are goods such as raw materials and agriculture-based products including wheat, corn, and soy. These commodities increase with inflation. Inflation will increase the price of wheat; wheat increases in price which in turn increases the price of bread.


3. Real Estate.

This is a tangible asset that will usually do well during times of inflation as property values increase with inflation. Think about a landlord who increases rent each year, to match inflation. Buying property through a REIT (Real Estate Investment Trust) gives you the opportunity to own commercial real estate properties that can make you money. If you’d rather own residential properties, mortgage payments remain the same in spite of inflation so even in times of uncertainty, you be on the ownership journey.


Gold

This is another tangible item that holds value and sometimes even increases with inflation. In the past, gold has consistently performed better than other commodities and continues to be a top choice for investors in times of inflation. Keep in mind the storage and insurance costs that come with owning gold.


Stocks

While stocks can be a great asset class, they can also carry risk. Companies on the stock market with pricing power can be a smart buy. As with non-tangible assets, the risk is simply in the instability of the world.。


At EssenCap Funding, we have our inhouse financial model to analyze a variety of assets with you. We have funding initiatives, such as single-tenant, large, mixed-used, office, apartment building, hotel, and construction loans.


We know our client has options, and we do encourage our client to speak to as many of the lenders as possible. We are here to educate and serve our clients.

We have our inhouse financial model to analyze a variety of funding





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