Make these funding strikes to beat inflation, specialists say
Investors worried about inflation should consider basing their portfolios on areas of the market that tend to do well as prices rise, according to Gargi Pal Chaudhuri, head of iShares Investment Strategy, Americas at BlackRock.
“So if you look at commodity producers, look at financials – and lately infrastructure – that has been an area of the market that has generated a lot of interest,” Chaudhuri said on CNBC’s Your Money event on Wednesday. (Watch the entire session.)
When it comes to fixed income securities, Chaudhuri said that Treasury inflation-linked securities, or TIPS, have done particularly well recently, “up over 5% this year”.
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“And we think this will continue to do well versus nominal bonds,” she said.
Chaudhuri also said real estate is another good investment in an inflationary environment.
However, it is only important that investors be aware of their own financial situation as well as that of the larger economies, said certified financial planner Marguerita M. Cheng, CEO and co-founder of Blue Ocean Global Wealth and a member of the CNBC advisory board.
“Your goals, your time horizon, your risk tolerance – that’s your strategic allocation,” said Cheng. “Then there are times when you can be a little tactical.”
Cheng tries to ensure that clients who are about to retire or are retired have the right amount of cash on hand without too much money coming out of the market, which protects them from stock risk but leaves them vulnerable to inflation could.
Another split issue on the table is growing how much people should split their money between traditional assets like stocks and digital assets like cryptocurrencies and NFTs or non-fungible tokens.
“Alternatives can be anywhere from 5 to 15 percent,” Cheng said.