Question of the day: Which type of investment serves best as a hedge against inflation?
Which type of investment serves best as a hedge against inflation?
Select one of the answers:
1] An income property that will maintain its value
2] An investment which acts as an annuity
3] An investment in municipal bonds
4] An investment which has great liquidity
The answer is 1] An income property that will maintain its value.
An income property that will maintain its value does so by providing an increased income when inflation makes money worth less. This property thus keeps its exchange value compared to other properties and so protects against inflation.