Four Hedges Against Inflation

With signs pointing to approaching inflation, there are four assets that provide a solid hedge against inflation.

You are receiving this email because you signed up to receive our free e-letter, or you purchased a product or service from its publisher, Early Investing. If you are having trouble viewing this email, click here to view it in your browser. There's Still Time to Hedge Your Bets By Adam Sharp, April 30, 2021 Dear Early Investor, In April 2019, Bloomberg Businessweek magazine's cover story asked "Is Inflation Dead?" The subtitle accompanying it was "Did Capitalism Kill Inflation?" I recall thinking at the time that this story was probably a contrarian indicator. It reminded me that nearly everyone in the financial world was ignoring the threat of inflation. It also has similarities to an infamous BusinessWeek cover story from 1979 titled "The Death of Equities." Stocks had performed miserably for a long time, and everyone was convinced that performance would continue to be horrible. But it actually marked the beginning of one of the greatest long-term bull markets. Today, inflation is starting to become more of a widespread concern. I detailed some of the latest signs in a recent article. And I recommend that all investors start hedging against the threat of inflation. How I'm Hedged My strategy against inflation is straightforward. There are basically four aspects to it. Gold, silver and miners Bitcoin Foreign stocks Startup investments Let's briefly go through each. Gold, Silver, and Miners I remain extremely bullish on gold and silver as well as quality companies that mine them. Realization about rising inflation is slowly setting in with some people -- but most investors still have near-zero exposure to precious metals. As governments around the world continue to print unimaginable amounts of money and interest rates stay at rock-bottom levels, I believe demand for gold and silver as investments will soar. I think people are still underestimating the scale and length of what's coming. Bitcoin Bitcoin is the only cryptocurrency I consider to be a viable inflation hedge. It's a scarce, speculative store of value. Needless to say, it's a lot riskier than gold and silver. But it also has much more upside. Bitcoin is a bet on continued reckless government spending and monetary policy. I still like that bet. See my recent article for more details on why I think bitcoin is an excellent hedge. Foreign Stocks If the U.S. dollar declines against foreign currencies, it may benefit investors to own stocks in foreign countries. Because the revenue of foreign companies is in a different currency, owning stock provides investors with exposure to the value of that currency. If the currency goes up against the dollar, the value of the investment will rise (approximately) the same amount. Startups Startup investments have an incredible amount of upside. If you invest in a company when it's worth $10 million and its value grows to $1 billion in five or so years, that's quite a return. It's one of the few asset classes that has the potential to outperform significant annual inflation. Needless to say, startup investing is risky. And it takes a while to get good at. So start out with small investments and be selective! I recommend going for companies with significant traction, at least at first. It's the most reliable signal there is. And if you want to receive in-depth research as well as access to exclusive founder interviews, consider signing up for First Stage Investor. We spend hours finding and analyzing the most promising startup investment opportunities out there (click here to sign up). Have a great weekend everyone! Adam Sharp Co-founder, Early Investing You are receiving this email because you subscribed to Early Investing. To unsubscribe from Early Investing, click here. Need help with your account? Click here. Have a question or comment for the editor? Click here. Please do not reply to this email as it goes to an unmonitored inbox. © 2021 Early Investing LLC All Rights Reserved Privacy Policy | Whitelist Early Investing Nothing published by Early Investing LLC should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. We expressly forbid our writers from having a financial interest in their own securities recommendations to readers. All of our employees and agents must wait 24 hours after online publication or 72 hours after the mailing of printed-only publications prior to following an initial recommendation. Any investments recommended by Early Investing LLC should be made only after consulting with your financial advisor and only after reviewing the prospectus or financial statements of the company. Protected by copyright laws of the United States and international treaties. The information found on this website may only be used pursuant to the membership or subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Early Investing LLC, Early Investing, 50 California St. , Suite 1503 , San Francisco, CA 94111, United States