Shield Your Portfolio From Inflation

Use our picks to hedge against rising prices that can eat into your investment returns.

illustration of an inflation dragon rearing its head, people fighting it off
(Image credit: Illustration by Neil Webb)

Investors fear inflation in the same way Superman dreads a pile of kryptonite. Just as the mysterious substance weakened the Man of Steel, a persistent rise in prices can diminish the strength of an investment portfolio. Inflation eats into returns and reduces the buying power of assets in investment accounts, such as 401(k)s. “Inflation has a scary connotation,” says Axel Merk, president and chief investment officer of Merk Investments.

Rising prices are especially scary for retirees with larger holdings of lower-return assets, such as cash and bonds. If inflation rises 3% every year, for example, a retiree who has enough saved today to spend $50,000 a year would need just over $67,000 a year by 2031 and more than $90,000 per year by 2041 to fund the same lifestyle, according to an analysis by Kendall Capital.

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Contributing Writer