Inflation remains the biggest worry among economists and among familiesโ€”yet the supposed hedge against inflation isn’t what it used to be. To beat an 8.3+% increase in the CPI, an investor would be looking for at least a 9% return. Unfortunately, none of the old, classic recommendations are getting there.

According to the US Bureau of Labor Statistics, the 12-month percentage change in the “all items” CPI reached 8.3% in September 2022. And this despite the fact that gas prices at the pump are falling. Which of the inflation hedges would allow investors to stay on top?

Let’s start with stocks. Here is daily S&P 500 price chart:

The index started the year up at 4800, and after falling as low as 3650 in June, is now trading at 3946. That’s a 17.8% drop in 8 1/2 months. The S&P 500 has not made any inflation-hedged lists so far this year.

What about other stock indexes? Here is the daily price chart for the NASDAQ


It started the year at 16500 and the price is now 12134, down 26%. Widely watched because it tracks so many of the most famous tech stocks, the index certainly doesn’t keep up with inflation.

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What about bonds, since stocks obviously don’t work? Here is daily price chart for the benchmark iShares 20+ Year Treasury Bond ETF:

The bond ETF started 2022 at 142 and is now trading at 108. That’s a 24% loss so far. Imagine the pain investors are feeling right now holding the classic 60% stock/40% bond portfolioโ€”often suggested by MBAs working for highly regarded investment firms.

Cryptocurrencies were designed as inflation hedges months and months ago. This is a daily bitcoin price chart:

You can’t quite see it on this chart, but Bitcoin started the year at 42,500 and the current price is 20026. That’s a 52% drop. Once this is marketed as a hedge against inflation, this marketing does not fit.

The old school hedge against inflation is the yellow precious metal. Here is daily price chart for SPDR Gold Shares:

If you bought at the beginning of the year, your price was 168. After a burst above 192 in March, the stock is now at 156. That’s a 7% loss, better than stocks, bonds, and Bitcoin, but still a loss so far in 2022.

It’s been a tough year for those investors looking to outperform the rate of inflation. Will the Fed’s upcoming rate hike improve the situation? We won’t find out for months.

Not investment advice. For educational purposes only.