3 assets that can help investors protect their portfolio against Tampa, FL’s higher-than-average inflation
Currently, residents in the Tampa, Florida, area are feeling the sting of inflation more acutely than people in other parts of Florida. The latest report from the U.S. Bureau of Labor Statistics claims that inflation in the region is 10.2%. This is compared to a statewide rate of 9.8%, and a nationwide rate of 8.5%.
According to Uluc Aysun, an associate professor of economics at the University of Central Florida, the Federal Reserve has the ability to help bring inflation down. It can do this by dropping some of the trillions of dollars of bonds on its balance sheet since the stock market crash of 2008.
But, Aysun warns, the effects this would have may take a long time to arrive. “It’s like a truck that’s traveling on the highway, let’s say it’s going 80 miles an hour,” Aysun said in an interview with News Channel 6. “So it’s not going to go to zero the next second. It’s going to take a lot of force to slow it down.”
What should investors do in the meantime? Financial planning experts recommend that now could be a good time to invest in assets that are considered to be immune to inflation.
What assets can protect against inflation?
Instead of assets with fixed, long-term cash flows, which tend to perform poorly during periods of high inflation such as long-term bonds, experts suggest that Tampa-area investors focus on these three assets to protect against inflation:
- Real estate investment trusts (REITs) — Investing in real estate is generally a good idea, because of the demand for homes and offices. However, instead of investing in tangible real estate assets, experts recommend real estate investment trusts. These assets are more liquid and can be easily bought and sold in the market.
- Gold — One of the selling points of investing in gold has always been its tendency to rise with inflation. Gold is a tangible asset that tends to hold its value. While investing in gold does not offer the same rate of returns as other assets during inflation and it does not pay any income while holding it, it could be a viable hedge against inflation.
- TIPS — Treasury inflation-protected securities, or TIPS, are a kind of United States Treasury bond. They are linked to the Consumer Price Index, and their principal is reset according to changes in the index. These bonds are designed to increase in value to keep pace with inflation and are considered one of the safest securities in the world since they are backed by the U.S. government.
What is the first step toward protecting my portfolio during record inflation?
Tampa-area investors need solid financial advice to protect their financial future during troubling times. With inflation showing no signs of slowing down anytime soon, there is no better time than now than to seek expert help with your portfolio. That’s where ProVise Management Group can help. Our CERTIFIED FINANCIAL PLANNER™ professionals can help your portfolio thrive no matter the economic climate.
We offer a wide array of financial services to high-value clients in Tampa and its surrounding communities, including:
Talk to a ProVise CFP® professional about your investment options during high inflation
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about protecting your assets during inflation? Contact ProVise today to schedule a complimentary consultation.