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Expert’s Advice: Where to Put Your Money During Inflation Surge?

experts advice where to put your money during inflation surge

Inflation is on people’s minds worldwide as it takes bigger and bigger chunks out of personal income. Not since the early eighties has the US seen the levels of inflation we have post-COVID-19. Inflation is being felt worldwide due to energy prices.

Most likely, inflation will come down over several years, but the question on everyone’s mind is, “What do I do with my money right now?”

The best way to think of inflation is that everything is getting more expensive, but your money is getting worse. Every dollar has less and less value as time goes on.

Here are some options the experts advise.


Treasury Inflation-Protected Securities (TIPS) are government bonds that rise and fall with inflation. When inflation increases, so do the pay rates. And when inflation declines, rates fall with it. 

Adding TIPS to your portfolio can help bring a much-needed balance to your fixed-income or bond portfolio. Furthermore, the US government backs them, making them very safe.

TIPS adjusts up or down in line with the Consumer Price Index to help protect against unexpected spikes in inflation. They pay twice a year at a fixed rate; the maturities are 5, 10, and 30 years. Investors are paid the adjusted or original principal at maturity, whichever is higher.

For an average investor seeking security, TIPS is by far the best inflation hedge.


While the value of your cash is falling, higher short-term interest rates are often a result of inflation. The Federal Reserve battles it with a higher fed funds rate that filters down to other interest rates. Considering how unpredictable the economy can be during high inflation, having cash on hand isn’t bad.

Putting some of your money into a money market account, CD, or high-yield savings account will generate some returns and keep those funds safe. 

Don’t keep too much cash on hand, or you risk opportunities to increase your wealth. Nine months’ worth of income is generally considered the most cash households should keep on hand.

Short-Term Bonds

You don’t know how long the period of high inflation will persist, so short-term bonds are an attractive strategy. Like a savings account or CD, your money is safe. Inflation often leads to rising interest rates, especially with short-term bonds.


Inflation tends to increase the prices of raw materials like metals, oil, and agricultural products, making them a good hedge.

Commodities can be risky depending on supply and demand metrics. If the higher inflation has reduced the purchases of products that use a specific raw material, expect its value to fall. 


Stocks have consistently outperformed inflation over the long term. Still, they can and do often suffer during a spike in short-term inflation. Market-tracking index funds are great investments as they keep costs low and are diversified with hundreds of stocks as part of the index.

While even an index fund can lose during periods of high inflation, they are traditionally considered very safe. They can also change course quickly when the market anticipates lower inflation numbers.

Real Estate

“Real estate tends to fair very well during periods of high inflation but also has the drawback of requiring large down payments,” says Gregory Womack, certified financial planner and founder of Womack Investment Advisers and GreneCo. “If interest rates have risen, what an investor can afford to purchase with a mortgage is reduced.”

REITs are a great way to invest in real estate as they don’t require significant down payments and diversify portfolios with the inflation-hedging benefits of real estate. Essentially, a REIT investor is buying a fund that only owns real estate and is required to pay out regular dividends. You invest what you’re comfortable with and become a passive real estate owner.


Gold is considered the oldest inflation hedge and has seen an average annual gain between September 2001 and September 2021 of 9.48%. Having some gold and silver bullion on hand may be a wise strategy. Also, trading gold and metals-related stocks is another way to participate in higher metal prices.

Purchasing, storing, and insuring physical gold have costs, whereas buying a gold-focused exchange-traded fund or mutual fund is similar to having the physical asset in your safe. Those funds don’t just track the price of gold; many track gold mining companies, and each type might produce very different returns.

Understanding that gold can have high price volatility in the short term is essential.

Alternative Asset Classes

When inflation is high, and markets are questionable, alternative assets are often very attractive. Artwork, wine, farmland, or startups are just some items that can now be invested in directly through specific companies. Depending on the investment, you’ll have a full or partial ownership stake in the investment.

You could own a $1,000 bottle of wine stored in a large company cellar and wait for it to appreciate. Maybe you’ll invest some money for partial ownership in farmland, just as you would invest in a REIT.  

There are a lot of investment options out there during high inflation. The best option will often come down to how much risk you want to take on. TIPS and money market accounts might suit you just fine, or you want to take on some higher short-term risk and invest in gold.

Either way, we will eventually get through this period of inflation, so set yourself up for success now.

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