How can I protect my investments from inflation?

To protect your investments from inflation, invest in assets that historically outperform inflation, such as equities, gold, real estate, and inflation-protected securities. Diversification and regular portfolio rebalancing can help maintain purchasing power over time.

1. Invest in Stocks

Stocks have historically provided returns that outpace inflation. Focus on companies with strong pricing power and stable earnings.

• Blue-chip stocks: Large, established companies tend to perform well against inflation.
• Dividend-paying stocks: Regular dividends help maintain real income.
• Sector diversification: Consider industries like technology and consumer goods, which can adjust prices with inflation.

2. Buy Gold and Commodities

Gold and commodities like oil and agricultural products tend to rise in value when inflation increases.

• Gold ETFs: A convenient way to invest in gold without physical storage.
• Silver and other metals: Often follow gold's price movement during inflationary periods.
• Commodity funds: Invest in a mix of natural resources to hedge against inflation.

3. Invest in Real Estate

Real estate provides rental income and tends to appreciate over time, making it a strong inflation hedge.

• Rental properties: Generate passive income that rises with inflation.
• Real Estate Investment Trusts (REITs): A liquid way to invest in real estate without buying physical property.
• Commercial real estate: Long-term leases often include inflation-adjusted rent increases.

4. Consider Inflation-Protected Bonds

Government-issued inflation-linked bonds like **Inflation-Indexed Bonds (IIBs)** or **Sovereign Gold Bonds (SGBs)** help preserve purchasing power.

• Treasury Inflation-Protected Securities (TIPS): Adjust principal based on inflation.
• Corporate inflation-linked bonds: Some companies issue bonds with inflation-adjusted payouts.
• Fixed Deposits with floating rates: Interest rates adjust based on inflation levels.