Inflation is an unavoidable force and is often tracked via a governance, which in this case is the Federal Reserve (Fed). When inflation is high, the cost of consumer goods and services increases over time. Higher rates can mark both positive and negative effects on the economy and stock market, meaning it is important for investors to act against inflation and rising interest rates. One way to do this is by diversifying their portfolio with real assets such as commodities, precious metals, and real estate. Investments in real estate can further be made through Real Estate Investment Trusts (REITs) or crowdfunding platforms. Treasury Inflation-Protected Securities (TIPS) bonds issued by the U.S. government can also be purchased to protect against inflation. Short-term bonds are less sensitive to interest rate hikes since they provide lower yields but are also less volatile and can help spread out the risk of investing in a single asset on their own. Bond funds provide similar degrees of diversification, as well as the advantage of buying into multiple stocks, bonds, and real assets without incurring too much risk in case of marketplace fluctuation. Alternative investments such as hedge funds, private equity, and real estate funds can all offer their own paths to managing inflation and their related interest rate hikes. Ultimately, proper diversification is the most sound way to protect any portfolio against inflation and those sudden changes in the stock market.



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