Is Inflation Devouring Your Retirement Dreams? Uncover the Top 6 Inflation Fighting Investments to Shield Your Purchasing Power NOW!

Is Inflation Devouring Your Retirement Dreams? Uncover the Top 6 Inflation Fighting Investments to Shield Your Purchasing Power NOW!

A Staggering 54% of Americans Slash Retirement Savings Amidst Inflation Woes. One in five Canadians have zero retirement savings, while close to half only have $5,000 or less, according to a June 2023 survey by Healthcare of Ontario Pension Plan. Here is how to fight back!

In the world of money, inflation can make it harder to keep the value of your savings. Investors are looking for ways to protect their money from losing value, and this article explores five types of investments that have a history of staying strong even when prices are going up. These investments can help your money grow or at least keep pace in times when its value might be at risk. It’s like having sturdy shields in the ongoing fight to keep your money from losing its worth.

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Real Estate

Owning real estate is a really smart way to protect your money from inflation. Real estate, like houses and land, tend to go up in value over time. This means that even when prices are rising due to inflation, the value of your property can keep up or even grow. Unlike some other investments, real estate is something you can see and use, like a house you can live in or rent out. Plus, when you rent it out, you get a regular stream of money that can help you keep up with rising prices. So, having real estate is like having a strong shield against the effects of inflation on your money.

Infrastructure Investments

Investing in infrastructure, like roads and utilities, is a smart way to protect your money from inflation. These investments are valuable because they provide essential services that people always need. When prices go up, the value of infrastructure tends to go up too, partly because it costs more to build things during inflation. Plus, these investments often have the power to adjust prices, so they can keep up with rising costs. Governments also tend to invest in infrastructure during tough times, which can make these investments more stable. So, putting your money into infrastructure can be a solid strategy to safeguard your wealth when prices are on the rise.

Real Assets

Investing in tangible assets, such as physical real estate, farmland, or timberland, serves as a potent hedge against inflation. These real assets have intrinsic value tied to the physical world, making them resilient to the eroding effects of rising prices. Physical real estate, in particular, often appreciates over time, providing both a shelter and an appreciating investment. Farmland, a critical component of the food supply chain, tends to gain value as demand for agricultural products increases with inflation. Timberland, with its renewable resource, represents an asset with long-term value. By diversifying a portfolio with these real assets, investors position themselves to navigate the challenges of inflation, aligning with enduring sources of value grounded in the tangible world.

Commodities and Precious Metals

Investing in precious metals like gold and silver, as well as commodities like oil, natural gas, and agricultural products, can be a savvy strategy to safeguard your money from inflation. These commodities have a reputation for holding their value, especially when prices are on the rise. In times of inflation, when the value of money tends to decrease, the intrinsic worth of precious metals and commodities often increases. Many investors turn to these tangible assets as a defensive choice as they tend to retain or even grow in value when other types of investments might face challenges. Incorporating precious metals and commodities into your investment mix can act as a robust shield against the negative impact of inflation on your wealth.

Stocks with Increasing Dividends

Buying good-quality stocks that regularly pay dividends and increase those payments over time is like building a strong defense against the rising cost of living. These stocks come from stable companies that are doing well financially. When you own them, you get a regular amount of money (dividends) from your investment. The cool thing is that these companies often raise the amount they pay over the years. This means the money you receive can keep up with or even beat the rising prices of things. So, investing in these kinds of stocks is like having a reliable source of income that helps protect your money from losing value when prices go up.

Quality Growth Stocks

Buying good-quality growth stocks is a smart move to protect your money from inflation. These stocks come from strong and growing companies that are good at making money. Unlike some other things you can invest in, the value of these stocks goes up as the companies grow, which can help you keep ahead of rising prices. Having these kinds of stocks is like having a strong defense against inflation — your money has the potential to grow along with successful companies.

One REALLY important thing to note!

Engaging in certain sectors like infrastructure, private investments, and real assets often requires you to be an accredited investor. This requirement excludes many individual investors from accessing these investments. However, an avenue exists for non-accredited investors to access these opportunities through portfolio managers. By working with a portfolio manager, non-accredited investors can invest with portfolio managers, and by entering into a discretionary relationship, the portfolio manager acts as the accredited investor on their behalf. This arrangement not only provides non-accredited investors with exposure to sectors that might otherwise be inaccessible but also ensures that they benefit from the skills and credentials of an accredited professional in managing these specialized assets.

What is an Accredited Investor?

An accredited investor is an individual or entity that meets specific financial criteria set by regulatory authorities, such as the U.S. Securities and Exchange Commission (SEC). In the United States, an individual is typically considered an accredited investor if they have an annual income exceeding a certain threshold (e.g., $200,000 for an individual or $300,000 for a couple) or a net worth exceeding $1 million, excluding the value of their primary residence. Entities, such as certain types of institutions and organizations, can also qualify as accredited investors based on their size or financial structure.

In Canada, an accredited investor is an individual or entity that meets certain financial criteria set by securities regulators. Individuals are considered accredited investors if they have a net income before taxes exceeding $200,000 in each of the two most recent years, or a combined net income with a spouse exceeding $300,000 in each of those years, and are likely to exceed that income level in the current year. Additionally, individuals with financial assets exceeding $1 million before taxes, either alone or with a spouse, can be classified as accredited investors. Certain entities, such as financial institutions, pension funds, and corporations with net assets exceeding $5 million, also qualify as accredited investors in Canada. Like in the U.S., being an accredited investor in Canada provides access to specific investment opportunities not available to the general public.

And Finally….

In facing the challenges of inflation, making smart choices with our investments is crucial. From things like farmland to precious metals and important infrastructure, having a mix of these options helps protect our money from losing value. While some investments might seem out of reach, like those in infrastructure that often need special status, having a portfolio manager can help everyday investors get access to these inflation-fighting investments. Working with an investment advisor and a portfolio manager provides guidance in your financial journey. It’s essential to mix things up, including assets that resist inflation and getting advice from professionals. This way, you can build a strong financial plan that keeps your money growing. So, by teaming up with experts and choosing the right mix of investments, you can navigate the ups and downs of the financial world and keep your money in good shape.

Have Questions? Contact us

We’ve assisted our clients through every stage of life. Even when you’re not aware that something might impact your financial future, it likely will to some extent. Engaging in a conversation with your investment advisor about any financial changes is an excellent approach to keeping your financial goals in focus.

We have the expertise in cross-border wealth management. Don’t hesitate to reach out to us — we’re committed to providing tailored solutions for your cross-border financial needs.

For more information or to connect with me, you can reach out via email at macekadmin@iaprivatewealth.ca or get to know me better by exploring my engaging video content on YouTube https://www.youtube.com/@joemacek.

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Don’t hesitate to reach out today at 1–888–324–4259 to discover more about how we can help you achieve your investment milestones.

Joe A. Macek, FMA, CIM, DMS, FCSI

Investment Advisor, Portfolio Manager

iA Private Wealth | iA Private Wealth USA

Toll Free North America: 1–888–324–4259

Email: macekadmin@iaprivatewealth.ca

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https://hoopp.com/home/pension-advocacy/research/canadian-retirement-survey-2023#:~:text=Cost%20of%20daily%20living%20remains%20the%20top%20concern%20for%20adults,%24100%2C000%20or%20less%20in%20savings.

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