The 5 best investing hedges which you need to consider in order to prevent any financial loss occurring due to future market crisis and disruptions
1. Go for Gold
Gold is a perfect hedge if you want to protect yourself during market crisis and disruption. Gold prices tend to benefit when inflation runs out of control. But Gold is also a hedge against a weaker US dollar. If Gold prices go up, the US dollar goes down and vice-versa. Historically, Gold has always been perceived as a form of money, which is the reason why it’s a good hedge against a dollar collapse or against hyperinflation.
2. Diversify Internationally
Exchange-traded funds (ETFs) and mutual funds are two of the easiest options to diversify investments into international markets. These types of funds are a low-cost way to invest, compared to purchasing a portfolio of American Depositary Receipts (ADRs) or foreign stocks.
3. Consider Real Estate
This asset class has intrinsic value and provides consistent income through dividends. It often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate.
4. Look to TIPS
Treasury inflation-protected securities (TIPS) are a type of U.S. Treasury bond, designed to increase in value in order to keep pace with inflation. Because they’re backed by the U.S. federal government, they’re considered among the safest investments in the world.
5. Buy Bank Loans
Some businesses can thrive during inflation, when prices are rising. Banks, for example, earn more money as interest rates rise and profit off the increased price of loans. Buying senior secured bank loans is a good way to earn higher yields while protecting yourself from a price drop if rates start to rise.
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