With the exception of the band I placed around my wife’s finger, I’ve never been a big fan of owning gold. I have however, invested in both farmland and passive real estate.
While the drivers of value vary from asset class to asset class, real assets tend to be positively correlated to inflation — that means when inflation increases, so should returns.
Real assets provide a tried and true hedge against inflation
The most common hedge against inflation is gold. Many investors flock to gold because it seems like a reliable store of value and the performance of gold is uncorrelated with the performance of the stock market.
Real estate is another real asset that can perform well in an inflationary environment. Investors with existing residential real estate can increase rents, which allows their income to stay flat or increase in real terms.