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A12 BUSINESS
Thursday 11 augusT 2022
3 ways to fight inflation and win the

long game

By LIZ WESTON
of NerdWallet
Inflation is scary. Groceries,
gas, airfare, car purchases,
utilities : In so many areas,
your buying power is shrink-
ing as prices continue to
rise. Fear can make you
want to do something any-
thing! to fight back. Thank-
fully, many of the best
moves to counteract infla-
tion align beautifully with
time-tested money man-
agement practices. Here
are three areas where
smart strategies become
even smarter when prices
are rising.
INVEST WITH THE LONG
TERM IN MIND
Advice about “inflation
proofing” your investments
often mentions gold, com-
modities and real estate . If
you already have a well-di-
versified portfolio, though,
beware of short-term strat-
egies that could backfire,
says Michelle Gessner, a
certified financial planner This undated file photo provided by NerdWallet shows Liz Weston,
in Houston. a columnist for personal finance website NerdWallet.com.
“Your best bet is stocks,” Associated Press
Gessner says. “Investing in mends that her clients in- credit card or other vari-
equities is one of the best vest 3% to 4% of their port- able rate debt, since that’s
hedges against inflation folios in real estate. likely getting more expen-
that there is.” “Everything in modera- sive as the Federal Reserve
Gold hasn’t been a reli- tion,” Gessner says. “More raises interest rates to com-
able inflation hedge since is not necessarily better.” bat inflation. If you can’t
the 1970s, Gessner notes. PAY DOWN DEBT THE SMART pay this debt off quickly,
Commodities basic goods WAY look into fixing the rate.
such as agricultural prod- Inflation can be good for You may be able to use
ucts, fuel and metals can people with fixed-rate a personal loan to pay off
be profitable when infla- debt such as mortgages, credit cards, for example,
tion spikes, but returns over car loans or federal stu- if you have good credit.
the long run have been dent loans. As inflation If you’re struggling to pay
disappointing. For the 20- erodes a dollar’s buy- your debt, a nonprofit
year period ending April ing power, borrowers are credit counselor can help
29, for example, the S&P able to pay back debt review your budget and
500 stock index more than with cheaper money than discuss options. You can
tripled while the Bloom- what they borrowed. Even get referrals from the Na-
berg Commodity Index without inflation, though, tional Foundation for Cred-
was up about 30%. financial planners say most it Counseling at www.nfcc.
Real estate has a better people have better uses org.
track record, both during for their money than pre- DELAY SOCIAL SECURITY
inflationary periods and paying debt with low, fixed One of the best inflation
for the long haul. But own- rates. Only after you’ve hedges that retirees can
ing property directly can maxed out your retirement have is a maxed-out Social
be a hassle, which is why savings, built up an emer- Security benefit, says Wil-
many financial planners gency fund and paid off liam Reichenstein, head of
recommend mutual funds, all other, higher-rate debt research for Social Security
exchange-traded funds should you consider mak- Solutions, a claiming strat-
or real estate investment ing extra payments on a egy website.
trusts that invest in office mortgage, for example. Social Security benefits
buildings, apartments, ho- “Having a mortgage at 3% are adjusted annually
tels, shopping centers and is not such a bad thing if for inflation, so the larger
other commercial proper- you can take that money someone’s benefit, the
ty. But even there, people and do something better more money they get from
shouldn’t go overboard, with it,” Gessner says. each annual cost-of-living
Gessner says. She recom- Consider targeting any adjustment.q