Inflation has been crazy going out this year, people have seen it and felt it in many ways. The fear is how do you keep up with inflation?

There are two different ways that we want to cover how to answer that question.

One is inside your investment portfolio.  One of the best ways that you can set up your portfolio to keep up with inflation is to be invested in inflation-protected stocks.

An example would be health care. People are still going to get their medicines and go to the doctor even if there’s inflation, we still are going to take care of ourselves. So, health care is one of those kinds of inflation-protected industries.

Then there are consumer staples, we all need certain things to live.

Materials and energy are also good because as inflation goes up, they go up.

So being in those right companies, right sectors, helps inflation protect your portfolio.

The second way to hedge against inflation is with wealth insurance, aka physical gold and silver coins.

Gold and silver have, for a long time, been thought of as an inflation hedge or wealth protection. They are very consistent and going up in this value.

This isn’t a quick growth investment strategy, but for that steady increase over time.

For example, when the Mustang came out in 1964, they were about $25,000.

So, you can see gold and silver both kept their value over time.The Federal Reserve created our currency without backing from gold and silver, which it used to have. Now, what we call the US dollar is actually the Federal Reserve Note, which is a fiat currency, meaning it has no backing by anything. Most currencies in the world have been operated this way for years. However, Russia recently changed its approach and started backing its currency with gold, which establishes a floor for the value of gold.

 

Whether you like Russia or not, this is positive for the gold world, and you’re seeing some other countries maybe take note. It’ll be interesting to see how this progresses.

In summary, you can protect yourself from inflation and safeguard your portfolio by investing in inflation-protected stocks and purchasing physical gold and silver coins. It is advisable to allocate approximately 10 to 15% of your overall portfolio for wealth insurance.

Next week, we’re going to talk about the difference in owning physical coins versus an ETF and what’s the difference between investing and collecting.