Inflation-Proof Investments: 8 Ways to Hedge Against Inflation in 2025
With inflation still high and interest rates climbing, many investors are looking for ways to protect their purchasing power. Inflation-proof investments—assets that tend to hold or grow in value as inflation rises—can help.
In this guide, we’ll share eight investments that may offer a solid hedge against inflation, including assets with limited supply, intrinsic value, or built-in demand like gold and real estate.
Note: I am not a financial advisor, and this is not financial advice. Please do your own research before investing.
Table of Contents
Inflation-proof investments at a glance
| Investment | Why it’s inflation-proof | Where to buy |
| Gold IRA | Holds intrinsic value; demand rises during inflation | American Hartford Gold |
| Crypto IRA | Limited supply, alternative store of value | iTrustCapital Crypto IRA |
| Physical gold | Tangible asset, time-tested hedge | Thor Metals Group |
| TIPS (Treasury Inflation-Protected Securities) | Principal adjusts with inflation | TreasuryDirect or brokerage platforms |
| Real estate | Property values and rents rise with Consumer Price Index (CPI) | Real estate platforms or REITs |
| Commodities | Prices of raw materials rise with inflation | Commodity ETFs or futures brokers |
| Dividend-paying stocks | Some companies raise dividends with inflation | Online brokerages (e.g., Fidelity or Schwab) |
| Series I Bonds | Interest rate directly tied to inflation | TreasuryDirect |
1. Gold IRA
Gold has long been considered a reliable store of value during times of economic uncertainty and inflation. Unlike fiat currency, which loses purchasing power as inflation rises, gold typically retains (or even increases) its value.
A gold IRA allows you to hold physical gold within a tax-advantaged retirement account, combining the benefits of long-term investment with the inflation-hedging properties of precious metals. In the past five years alone, gold prices have nearly doubled.
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Pros and cons of a gold IRA
Like any investment, a gold IRA has its pros and cons.
Pros
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Tax advantages
Like traditional IRAs, gold IRAs offer tax-deferred or tax-free growth depending on the type of account.
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Inflation protection
Gold has historically preserved value during high-inflation periods, offering a hedge against dollar depreciation.
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Diversification
Adding physical gold to your portfolio helps reduce overall risk and adds balance during market downturns.
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Physical asset
Unlike stocks or bonds, gold is a tangible asset that can’t be hacked or erased digitally.
Cons
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Storage and custodial fees
Gold IRAs require secure storage and a custodian, which adds annual costs.
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Limited liquidity
It may take time and effort to liquidate your holdings compared to traditional securities. It might take time to find a buyer willing to pay over the spot price.
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No income
Gold doesn’t generate dividends or interest, so returns rely solely on price appreciation.
How to open a gold IRA: To get started with a gold IRA, you’ll need to open an account through a trusted provider. We recommend American Hartford Gold, known for its excellent customer service, competitive pricing, and buyback guarantee.
You can roll over funds from your IRA or 401(k) into a gold IRA with the provider’s help. Learn more about how gold IRAs work and the benefits of a gold IRA before making your decision.
2. Crypto IRA
Cryptocurrencies like bitcoin and ethereum are increasingly seen as digital stores of value due to their decentralized nature and limited supply.
Unlike fiat currencies, which central banks can inflate through excessive printing, many cryptocurrencies have fixed or predictable issuance schedules. This means new coins are released into circulation at a set rate, making the total supply transparent and limited and helping protect the asset’s value from inflation over time.
A crypto IRA, similar to a gold IRA, lets you hold digital assets in a tax-advantaged retirement account, potentially allowing for long-term growth while hedging against currency debasement.
With inflation rising and traditional assets under pressure, crypto IRAs offer a modern, alternative way to preserve wealth and diversify your portfolio for the digital age. Some crypto investors even believe bitcoin will go to $1 million per coin and beyond.
Pros and cons of a crypto IRA
There are reasons both for and against this inflation-proof investment:
Pros
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High growth potential
Cryptos like bitcoin have outperformed many traditional assets over the past decade, offering significant upside. Bitcoin has increased 33,000% in the last 10 years.
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Limited supply
Bitcoin’s supply is capped at 21 million, making it resistant to inflationary dilution.
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Tax-deferred or tax-free gains
Holding crypto in an IRA means gains can grow without immediate tax implications.
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Portfolio diversification
Adds exposure to an emerging asset class outside of traditional financial systems.
Cons
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Volatility
Cryptocurrency prices can swing dramatically, which may be risky for conservative investors.
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Security concerns
Although IRAs use custodians with high-level security, the risk of hacks or breaches is not zero.
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Regulatory uncertainty
Crypto regulations continue to evolve, which could affect how these assets are taxed or traded in the future.
How to open a crypto IRA: To invest in crypto through your IRA, you’ll need a specialized platform. We recommend iTrustCapital, one of the top-rated crypto IRA providers. It offers a user-friendly platform with access to major cryptocurrencies like bitcoin and ethereum, low fees, and institutional-grade custody.
After setting up an account, you can fund your crypto IRA via a rollover or direct contribution and start buying digital assets with tax advantages.
3. Physical gold
While gold IRAs are great for long-term, tax-advantaged retirement savings, buying physical gold gives you more direct control and immediate access to your investment. Retirement account rules, early withdrawal penalties, or third-party custodians do not limit you.
Physical gold is ideal if you want a tangible asset you can hold, store securely, or quickly liquidate in times of crisis. It also offers privacy—there’s no digital footprint—and gives you peace of mind that your wealth is safely outside the traditional financial system.
For investors who value independence and liquidity, owning physical gold is a powerful way to hedge against inflation.
Pros and cons of physical gold
Here’s what you should know:
Pros
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Tangible asset
Physical gold is a hard asset you can hold in your hand—free from digital or institutional control.
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Inflation-resistant
Historically, gold has maintained or increased its value during inflationary periods.
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Universal value
Gold is globally recognized and can be traded or sold almost anywhere.
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No counterparty risk
Unlike stocks or bonds, gold isn’t dependent on the solvency of a company or government.
Cons
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Storage and insurance costs
Storing physical gold securely often means paying for a safe, vault, or insurance.
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Not easily divisible
Selling small amounts can be challenging unless you own fractional gold bullion or coins.
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No yield
Gold doesn’t generate interest or dividends—its value relies on price appreciation.
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Risk of theft
Keeping gold at home comes with security risks unless properly protected.
How to buy physical gold: You can buy physical gold in the form of coins, bars, or bullion through reputable dealers. We recommend Thor Metals Group, which offers the best buyback program in the industry.
Thor Gold is one of the best gold dealers on the market, with a seamless process for purchasing, securely storing, and reselling physical gold.
4. Treasury Inflation-Protected Securities (TIPS)
TIPS are U.S. government bonds specifically designed to protect your investment from inflation. Unlike traditional bonds, which pay a fixed interest rate, TIPS adjust both their principal and interest payments in response to changes in the Consumer Price Index (CPI).
As inflation rises, the principal amount increases, leading to higher interest payments and a larger payout at maturity. This built-in inflation adjustment makes TIPS a low-risk, government-backed means of preserving purchasing power.
TIPS are especially appealing for conservative investors or those close to retirement.
Pros and cons of TIPS
Here’s what you need to know about TIPS:
Pros
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Inflation-linked returns
TIPS adjust automatically with inflation, ensuring your investment keeps pace with rising prices.
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Government-backed security
Issued by the U.S. Treasury, TIPS carry virtually zero default risk.
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Low volatility
Less susceptible to dramatic market swings than stocks or commodities.
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Can be bought directly
Available through TreasuryDirect or most major brokerages without middlemen.
Cons
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Lower yield
TIPS often offer lower base interest rates compared to other bonds.
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Interest is taxable
Both the interest payments and the inflation adjustment are subject to federal income tax.
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No upside beyond inflation
TIPS are great for preservation but won’t offer high returns beyond inflation protection.
How to invest in TIPS: You can purchase TIPS directly from the U.S. Treasury at TreasuryDirect.gov or through most brokerage accounts. They’re available in five-, 10-, and 30-year terms and can be held in taxable or tax-advantaged accounts.
For hands-off investing, consider a TIPS ETF like TIP or VTIP for diversified exposure.
5. Real estate
Real estate is one of the most reliable long-term hedges against inflation.
As the cost of living rises, so do property values and rental income, making real estate investments more valuable over time. Land and property are also tangible, finite resources—meaning they generally hold intrinsic worth regardless of economic conditions.
In periods of high inflation, landlords often raise rents, helping investors maintain or even grow their cash flow.
Whether you invest in rental properties, real estate investment trusts (REITs), or raw land, real estate offers a mix of capital appreciation, income, and inflation protection. They’re also a great way to diversify your investments.
Pros and cons of real estate
Here’s what to know about real estate investments:
Pros
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Rental income adjusts with inflation
Lease renewals often come with rent increases, providing built-in inflation protection.
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Appreciation potential
Real estate tends to increase in value over time, especially in high-demand areas.
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Tax benefits
Owners can take advantage of depreciation, mortgage interest deductions, and more.
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Leverage opportunities
Cons
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Requires active management
Owning property often involves maintenance, tenants, and property management.
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High upfront costs
Down payments, closing fees, and repairs can be a barrier to entry.
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Market and location risk
Not all real estate performs equally—local market conditions can affect value.
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Illiquidity
Unlike stocks or bonds, real estate isn’t easy to sell quickly.
How to invest in real estate: You can buy rental properties directly, invest in vacation rentals, or go the passive route with REITs—publicly traded funds that let you invest in real estate like you would with stocks.
For beginners, REITs are a great way to get started with lower capital and less hands-on effort.
6. Commodities
Commodities such as oil, natural gas, agricultural products, and industrial metals are raw materials whose prices tend to rise as inflation increases.
That’s because they are the building blocks of goods and services, so when production costs go up, commodity prices typically follow. Investing in commodities provides direct exposure to inflationary trends, making them an effective hedge.
Additionally, during periods of economic uncertainty or currency devaluation, physical assets such as oil and wheat often retain or increase in value, providing a layer of protection for your portfolio.
Pros and cons of commodities
Pros
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Direct inflation exposure
Commodity prices often rise when inflation spikes, offering natural protection.
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Diversification
They often move independently of stocks and bonds, reducing portfolio risk.
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Global demand
Basic goods like energy and food are always in demand, even during downturns.
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Multiple ways to invest
You can gain exposure through futures, ETFs, mutual funds, or commodity-focused stocks.
Cons
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High volatility
Commodity prices can swing sharply due to weather, geopolitics, or global demand shifts.
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No passive income
Unlike dividend stocks or real estate, commodities don’t generate income.
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Complexity
Understanding supply-and-demand dynamics, futures markets, and storage costs requires more expertise.
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Regulatory and geopolitical risk
Global events and policy changes can have an outsized impact on commodity markets.
How to invest in commodities: You can invest in commodities through ETFs like $DBC (broad commodity exposure) or $PDBC (actively managed). These funds track prices of energy, metals, and agriculture without requiring futures contracts.
For more targeted exposure, consider sector-specific ETFs (e.g., energy or agriculture) or stocks of commodity-producing companies.
7. Dividend-paying stocks
Dividend-paying stocks, especially from companies with a history of increasing payouts over time, can be a strong inflation hedge.
These businesses typically have pricing power, meaning they can raise the cost of their goods or services in response to inflation without losing customers. This enables them to grow revenues and continue rewarding shareholders with dividends that may rise in line with inflation.
Investing in blue-chip stocks or Dividend Aristocrats—companies that have consistently raised dividends for more than 25 years—can provide both income and long-term capital appreciation, helping protect your purchasing power over time.
Pros and cons of dividend-paying stocks
Pros
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Rising income potential
Many dividend stocks increase their payouts annually, helping you keep pace with inflation.
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Capital appreciation
In addition to dividends, you benefit from the stock’s potential to grow in value.
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Liquidity
Stocks can be bought and sold easily compared to assets like real estate or physical gold.
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Tax advantages
Qualified dividends are taxed at a lower rate than regular income in many cases.
Cons
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Market risk
Stocks are subject to market volatility and can lose value in downturns.
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Not all dividends are inflation-adjusted
Some companies may freeze or cut dividends in tough economic conditions.
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Lower yields vs. fixed income
Compared to bonds or real estate, dividend yields can be relatively modest.
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Requires careful stock selection
Not all dividend-paying companies are financially strong or inflation-resistant.
How to invest in dividend-paying stocks: You can buy individual dividend stocks through a brokerage or get instant diversification with ETFs like $VIG (Vanguard Dividend Appreciation ETF) or $NOBL (S&P 500 Dividend Aristocrats ETF).
These funds focus on companies with strong track records of consistent and growing dividends, making them ideal for long-term inflation protection.
8. Series I savings bonds
Series I Savings Bonds, issued by the U.S. Treasury, are specifically designed to protect your money from inflation. They offer a composite interest rate made up of a fixed rate and a variable inflation-adjusted rate that changes every six months based on the Consumer Price Index (CPI).
This means your returns automatically rise with inflation, ensuring your purchasing power is preserved. Backed by the full faith and credit of the U.S. government, I Bonds are one of the safest and most straightforward ways to hedge against inflation with virtually no risk of losing your principal.
Pros and cons of Series I Bonds
They are virtually risk-free, but I Bonds have a few cons to be aware of.
Pros
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Inflation-adjusted returns
The interest rate adjusts every six months to reflect current inflation levels.
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Government-backed
Virtually no default risk, making them one of the safest investments available.
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Tax advantages
Interest is exempt from state and local taxes and can be deferred until redemption.
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Accessible to individuals
You can buy directly online with as little as $25 through TreasuryDirect.
Cons
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Purchase limits
You can only buy up to $10,000 per year electronically (plus $5,000 with a tax refund).
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Early withdrawal penalty
If you cash out before five years, you lose the last three months of interest.
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Limited liquidity
Must be held for at least 12 months, so they’re not suitable for short-term needs.
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No capital appreciation
Returns are interest-based only; you won’t benefit from price growth like with stocks.
How to buy Series I Bonds: You can purchase Series I Bonds directly from the U.S. Treasury at TreasuryDirect.gov. All you need is a TreasuryDirect account, a linked bank account, and a minimum of $25 to get started.
I Bonds can be a smart, low-risk addition to your portfolio—especially when inflation is high.
All the listed investment options offer effective ways to hedge against inflation; however, their suitability depends on my client’s risk tolerance and investment time horizon. Regardless of age or the current interest rate environment, maintaining a well-diversified portfolio remains essential.
Typically, younger clients can afford to adopt a more aggressive strategy because they aren’t yet withdrawing from their investments and can better weather market and economic volatility. In contrast, older clients—particularly those nearing or in retirement—are more likely to require protection for their assets; they are often drawing from their portfolios and may be more vulnerable to market downturns.
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