This is the “greatest threat” to stocks and to society – protect yourself now
The stock market rebounded after a gloomy September, but a billionaire hedge fund manager believes it would be a mistake to let our guard down.
Paul Tudor Jones, who heads Tudor Investment Corporation, told CNBC last week that soaring inflation remains “the greatest threat to financial markets and society in general.”
“If we don’t move immediately to attack it,” Jones warns, “we risk going back to the 1970s, where it was the biggest problem for many presidents, many Fed chairmen.”
Regardless of what officials do in Washington, there are steps you can take to protect your own wallet. Here are three assets you can use to hedge against inflation, even if you’re just sprinkling some of the your spare currency on them.
Due to their violent fluctuations in value, cryptocurrencies remain a higher risk solution to the inflation problem. But more and more investors, including Jones, are joining them.
âWe are entering an increasingly digital world. It is clear that there is a place for crypto, and it is winning the race against gold, âhe says.
“Crypto would be my favorite inflation hedge against gold at the moment.”
There are many ways to play the crypto boom. For example, ProShares Bitcoin Strategy ETF owns bitcoin futures contracts that trade on the Chicago Mercantile Exchange.
Investors can also gain exposure to Bitcoin through companies that have linked to the crypto market, such as Coinbase, Tesla, and PayPal.
Of course, you can also buy Bitcoin directly. Crypto exchanges often charge up to 4% commission fees, but some investment applications charge 0%.
Real estate has been a popular hedge against inflation throughout history. Not only do real estate prices tend to rise in an inflationary environment, rental properties can also generate a stable income stream for investors.
These days, however, you don’t have to be a homeowner to collect rent checks. Publicly traded real estate investment trusts (REITs) own and operate income generating properties on behalf of investors.
Jones owns a number of stocks in this sector.
According to Tudor’s latest 13F file with the Securities Exchange Commission, the hedge fund held stakes in Digital Realty Trust, Public Storage, Kimco Realty, Simon Property Group, Vici Properties and National Retail Properties.
These REITs all offer regular dividend payouts with returns above the S&P 500.
If you want to follow suit, some popular investment services allows you to ensure a stable income stream by investing in high-end real estate, from commercial developments in LA to residential properties in New York.
This one is often overlooked. But, with inflation on the rise, Bank of America chief investment strategist Michael Hartnett said earlier this year that collectibles like wine and art could outperform over the next decade.
Contemporary art has already outperformed the S&P 500 by 174% in the past 25 years, according to the Citi Global Art Market chart.
It also helps that fine art has little correlation with the ups and downs of the stock market and the crypto market.
Investing in art by Banksy and Andy Warhol was previously only an option for the ultra-rich, like Jones. But with a new investment platform, you can also invest in iconic artwork, just like Jeff Bezos and Bill Gates do.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.