Five assets that could beat inflation in 2024
#1 & #2 Gold and Silver Gold and silver are classic inflation hedges. Their prices have risen recently, and many market experts hold a bullish outlook for these metals in 2024. As international and monetary assets, their values are closely tied to the US dollar's strength.
The direction of the US dollar largely depends on international fund flows, which are influenced by interest rates. With the US Federal Reserve signalling potential rate cuts in 2024, investors might shift their funds from safe US government bonds to riskier assets. Some of these funds are expected to flow into gold and silver, as falling interest rates are likely to weaken the US dollar, which bodes well for these metals.
For guidance on investing in gold and silver, check out Equitymaster's resources. In periods of high inflation, investors often turn to stocks of large, well-established companies known for their substantial cash flows and generous dividend payouts. These companies can typically pass on increased raw material costs to consumers without losing market share.
Their stability makes them attractive during inflationary times. Equitymaster offers a screener for identifying high dividend payout stocks and high dividend yield stocks in India. Real estate is a long-term asset, but it's expected to maintain its value in 2024.
With interest rate hikes ceasing and a potential rate reduction cycle on the horizon, EMIs are likely to stabilize or decrease. Combined with gradually increasing incomes, real estate could become more affordable, potentially leading to a rise in both property values and rents. However, real estate should always be considered a long-term investment and requires thorough due diligence.
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