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How can you keep your money safe from inflation?
Many people are concerned that rising costs may eat into their savings as inflation reaches its greatest level in three decades.
As the cost of everything from microchips to bed linens rises, the money in your checking or savings account loses purchasing power. But don’t get too worked up. According to statistics provided by Dimensional Fund Advisors, there’s good news, at least in terms of your investments.
“Most of the asset classes we investigate have actually been able to exceed inflation over the long run,” said Mamdouh Medhat, a researcher at Dimensional Fund Advisors, a firm that manages more than $600 billion and specializes in applying academic research to investing. For its inflation study, the corporation looked at a wide range of assets, including bonds, equities, and commodities.
Quartz chatted with a number of financial professionals about how to keep your funds intact when prices rise, from stocks to homes to investing in yourself.
The stock market
Equity investments, according to Ben Carlson, director of institutional asset management at Ritholtz Wealth Management, are arguably the greatest method to fight inflation over the long term. Stock market gains have tended to surpass growing costs, according to research, and this year is no…