Inflation Hedge

If you’re invested in a currency that’s suffering from inflation-fever, you might want to look into an inflation hedge. An inflation hedge is an investment that hedges against the eroded value of a currency from inflation.

Investors who aren’t paying attention to exchange rates and inflation might think they’ve made a steal-of-a-deal, only to find out that they actually lost money from inflation. An inflation hedge helps balance the risk of investing in a currency whose value might erode.

In order for the investment to be an inflation hedge, it should be of another currency than the one that might erode from inflation, and it should be an investment in an asset that is expected to increase in value over a predetermined time period.