What is inflation and why does it matter for investments?

Inflation is the general increase in prices and fall in the purchasing power of money over time. When inflation rises, each dollar buys less than it did before. This matters for investments because it can erode the real returns on your money. For example, if your investment returns 5% but inflation is 4%, your real gain is only 1%. Inflation hedge investments like those in this basket are specifically chosen because they tend to maintain or increase their value during inflationary periods.

Why are precious metals considered inflation hedges?

Precious metals like gold and silver have been valued for thousands of years and have a limited supply. Unlike paper currency, which governments can print more of (potentially causing inflation), the supply of precious metals grows only slowly through mining. This limited supply, combined with consistent demand, helps precious metals maintain purchasing power when currencies weaken. Companies that mine these metals often see their stock values increase with the price of the metals they produce.

What makes infrastructure investments good during inflation?

Infrastructure companies own essential physical assets like roads, bridges, utilities, and communication networks. These assets have intrinsic value and provide services that people need regardless of economic conditions. Many infrastructure businesses can raise their prices with inflation through contractual agreements or regulated pricing models. Additionally, the replacement cost of these physical assets typically increases during inflation, enhancing their underlying value.

What is a dividend yield and how does it relate to inflation protection?

Dividend yield is the annual dividend payment as a percentage of a stock's current price. For example, if a $100 stock pays $4 in annual dividends, it has a 4% yield. During inflation, companies that can increase their dividends may help investors maintain purchasing power. Many commodity producers and infrastructure companies in this basket have histories of paying dividends that grow over time, providing both income and potential inflation protection.

What's the difference between royalty companies and miners in this basket?

Mining companies like NEM or PAAS directly operate mines to extract precious metals, assuming operational costs and risks but potentially higher rewards. Royalty companies like RGLD don't operate mines themselves but instead provide financing to miners in exchange for a percentage of future production or revenue. Royalty companies typically offer lower risk with more diversified exposure to metal prices, while miners offer more direct leverage to rising commodity prices. This basket includes both types to provide balanced exposure to precious metals.

14 handpicked stocks

Inflation Hedge Basket

Looking to protect your money from rising prices? This collection features companies that own real, physical assets from gold mines to global infrastructure. Professional analysts have selected these stocks specifically for their ability to maintain and potentially increase in value during inflationary periods.

Han Tan | Market Analyst

Published on June 17

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Newmont Mining Corp.

NEM

Current price

$85.99

As a leading global gold producer, it offers direct exposure to a primary monetary hedge against inflation.

Pan American Silver Corp

PAAS

Current price

$39.19

This company is a significant silver producer, providing a hedge through a key precious metal with both monetary and industrial value.

Freeport-McMoRan Inc.

FCX

Current price

$38.87

As a dominant global copper producer, the company provides exposure to an essential industrial metal that acts as a tangible store of value.

BHP Billiton Limited

BHP

Current price

$55.32

Royal Gold, Inc.

RGLD

Current price

$198.31

Vale S.A.

VALE

Current price

$11.02

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About This Group of Stocks

Our Expert Thinking

When inflation rises, money buys less over time. These companies own tangible assets like precious metals, industrial commodities, and infrastructure that historically maintain or increase in value when currencies weaken. This makes them a strategic addition to any portfolio during uncertain economic times.

What You Need to Know

This collection provides defensive protection through companies with intrinsic value linked to physical goods. It blends traditional inflation hedges like gold and silver miners with businesses that own essential infrastructure, offering both potential price appreciation and stable cash flows.

Why These Stocks

These companies were handpicked because they control real-world assets that typically perform well during inflation. Rather than purely financial instruments, these businesses extract valuable resources, manage critical infrastructure, or own physical property - all historically effective at preserving wealth.

Group Performance Snapshot

10 of 14

Stocks Rated Buy by Analysts

10 of 14 assets in this group are rated Buy by professional analysts.

11.3% vs 4%

Group Growth vs Bank interest

This group averaged a 11.3% return last month, beating the typical 4% bank rate.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🛡️

Protect Your Savings

As inflation erodes the purchasing power of your cash, these companies offer a shield through ownership of real, valuable assets that tend to rise in price along with everything else.

🌍

Global Uncertainty Plays

With ongoing economic instability and geopolitical tensions, investors worldwide are turning to tangible assets as safe havens, potentially driving demand for these stocks.

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Dividend Potential

Many of these companies not only preserve capital but also generate income through dividends, giving you two ways to benefit while protecting against inflation.

Get the full story on this Basket. Read our detailed article on its risks and potential.

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