The metal has traditionally had an inverse relationship to interest rates, with demand for the precious metal increasing when rates are low, as they currently are, and is often
seen as a hedge against inflation.
Indeed, gold is often
seen as the hedge against inflation, since it often gains value as the dollar loses it (but not always).
Among hard assets, the classic investment is gold, which is widely
seen as a hedge against inflation and political turmoil, and viewed as a good diversifier for financial assets like stocks and bonds.
Not exact matches
And now that our careers are going, we're looking at maxing out two traditional 401Ks and two Roth IRAs this year, and we
see the Roth IRA portion
as a small
hedge against rising future tax rates (or what I think is a bit more likely to happen — tax brackets that don't keep pace with
inflation, so keep sucking in more and more people to higher brackets).
Agricultural land in the Great Plains has
seen strong price growth over the past few years,
as institutional investors found it an attractive
hedge instrument
against inflation expectations, coupled with strong returns.
By and large, this group is not looking to invest in oversized homes, yet we could
see improvement in higher price ranges
as a
hedge against inflation and risk.
FOMC members are concerned that
inflation will show up only with a lag, though, and I
see policymakers most likely will continue with moderate rate increases
as a
hedge against future
inflation.