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Kavan Choksi Wealth Advisor Marks The Best Investments To Beat Inflation


Inflation is a completely normal occurrence for the economy. The inflation rate typically averages somewhere around 2%. In certain cases, the inflation rate may even be negative by the end of the year. Such a situation, however, is very uncommon. Therefore, according to Kavan Choksi Wealth Advisor, investors need to plan for at least a 2% inflation rate each year. Keeping a percentage of funds in long-term investments as part of a diversified portfolio would be among the most effective ways to maintain personal finances when inflation rises.

Kavan Choksi Wealth Advisor underlines a few types of investments that can help beat inflation

Rising prices have essentially become an unavoidable fact of life for the majority of Americans. One hears about inflation in the news, see its impact on the prices of various products at the grocery store, and may even witness its effect on their investments. Inflation has the capacity to erode the purchasing power of an investor’s portfolio, even if they maintain positive returns year-over-year. However, there are certain types of investments that can lower the impact of inflation on an investor’s portfolio. Here are some of these types:

  • REITs: A lot of inflation-averse investors tend to turn to real estate to hedge their holdings. However, the variability and the size of the market may make it difficult to generalize about this specific asset class. Real estate investments often require big buy-ins and a variety of costs for maintenance. To avoid such issues, it would be prudent for investors to opt for real estate investment trusts (REITs) instead. REITs offer a simple way for regular investors to diversify their portfolios and get the inflation hedging benefits of real estate. Investing in REITs is pretty much like buying a fund that exclusively owns real estate. Regulations require them to pay out regular dividends, making them an appealing option, especially for income investors.
  • Savings bonds:  The U.S. Treasury sells savings bonds that have been designed to earn interest on the basis of a fixed rate, as well as one that is adjusted for inflation. The interest rate is set once every six months or so, and shall be altered on the basis of the current rate of inflation. The good thing about such I-bonds is that they provide both long-term and short-term investment opportunities. I-Bond will earn interest for thirty years, but one can cash it out simply after a couple of years, if they want.  In case an investor does cash it out before five years, they however would be assessed a penalty of three months of interest. But after five years of purchasing the I-Bond, one can cash it out with no such penalty attached.
  • Silver and gold: Precious metals like gold and silver have been used as a currency or a means of exchange for centuries. The ideal time to invest in gold or silver is when the currency is losing value during times of inflation. After all, as the dollar weakens, commodities become more expensive.

As per Kavan Choksi Wealth Advisor, investors must be proactive about protecting their bottom line. Investing in the options mentioned above can not only help investors to weather the storm of inflation, but may also enable them to come out the other side with a solid profit.

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