U.S. consumer prices climbed by 6.8% in November, marking the fastest pace in 39 years. And while the stock market continues to largely shrug off inflation concerns, many well-known investors have been busy sounding the alarm.
Rich Dad Poor Dad author Robert Kiyosaki is one of the more vocal ones.
“Crash and Depression coming,” Kiyosaki tweeted earlier this week. “Time to get richer after fake inflation crashes. Be aware. Take care.”
To be sure, Kiyosaki has made similar calls in recent months that haven’t exactly worked out. In September, he told Kitco News that “the biggest crash in world history” would hit in October.
But Kiyosaki isn’t backing down from his ultra-bearish stance. In fact, he’s doubling down on his favorite inflation-fighting assets.
“I am buying more gold, silver, Bitcoin, ethereum, rental real estate, and oil,” he wrote in tweet from last month.
For those who share Kiyosaki’s concerns, let’s take a quick look at these inflation hedges. One could be worth investing in with some of your extra cash.
Gold and silver
The famous author is a long-time advocate of investing in precious metals. And it’s obvious why he’s still pounding the table on the two most popular ones: gold and silver.
Gold has helped investors preserve their wealth for centuries. It can’t be printed out of thin air like fiat money and its value is largely unaffected by economic events around the world.
Silver can also be a store of value and a hedge against inflation. Plus, silver is an industrial metal. It’s widely used in the production of solar panels and is also a critical component in many vehicles’ electrical control units.
You can buy physical gold and silver at your local bullion shop. Or, you can look at large-cap miners like Barrick Gold, Newmont, and Wheaton Precious Metals.
If gold and silver prices go up, these miners are very likely to thrive.
Bitcoin and ethereum
Some consider bitcoin to be the new gold. And Kiyosaki likes it, too.
When bitcoin surged past $60,000 in October, the author tweeted that the future of the cryptocurrency is “very bright,” but was just waiting for a dip before investing more.
Well, bitcoin has certainly pulled back since then, currently trading at roughly $47,660.
Kiyosaki is also buying ethereum. While ethereum isn’t as large or as popular as bitcoin, its usage in peer-to-peer lending, NFTs, gaming, and stablecoins means it’s something crypto investors shouldn’t ignore.
You can buy bitcoin and ethereum directly.
Today, many exchanges charge up to 4% in commission fees just to buy and sell crypto. But some investing apps charge 0%.
You can also invest in companies that have tied themselves to the crypto market.
HIVE Blockchain, for instance, mines both bitcoin and ethereum. The stock is up about 55% year to date.
There’s also Coinbase, which runs the largest cryptocurrency exchange in the U.S. With 7.4 million monthly transacting users, the company raked in revenue of $1.24 billion in Q3.
To be sure, Coinbase currently trades at $270 per share. But you can own a piece of the crypto exchange using a popular stock trading app that allows you to buy fractions of shares with as much money as you are willing to spend.
Owning real estate has historically been one of the most effective ways to both hedge against inflation and earn a passive income.
And these days, you don’t need to be a landlord to do it.
There are plenty of publicly traded real estate investment trusts that provide generous cash distributions to investors. These companies own income-producing real estate, collect rent from tenants, and then pass the money to shareholders in the form of regular dividends.
Realty Income, for instance, has been acquiring and managing commercial properties for over five decades. It earns rental revenue from long-term, net lease agreements and pays monthly dividends to investors.
You can look outside of the stock market, too.
For instance, some popular investing services let you lock in a steady rental income stream by investing in premium commercial real estate properties — from R&D campuses in San Jose to industrial e-commerce warehouses in Baltimore.
One of the surest signs of surging inflation is in the commodities rally we saw earlier this year. In fact, commodity prices are commonly believed to be a leading indicator of inflation.
So it shouldn’t come as a surprise that oil — the most traded commodity in the world — is also on Kiyosaki’s list.
The price of crude oil has slipped over the past month, but is still up more than 40% year to date.
As you’d expect, strong oil prices benefit oil producers. So far this year, investors have enjoyed outsized returns from names like Chevron (40%), Exxon Mobil (51%), and ConocoPhillips (84%).
That said, investing in commodities is a particularly volatile undertaking.
If you’d rather invest in something without the extreme ups and downs of stocks, cryptos and commodities, take a look at a few under-the-radar alternative assets.
Traditionally, investing in things like exotic vehicles or litigation finance or even marine finance have only been options for the ultra rich, like Kiyosaki.
But with the help of new platforms, these kinds of opportunities are now available to retail investors, too.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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