Where to Invest During Inflation: Assets That Hold Value

When inflation rises, every naira (or dollar) you hold buys less. Your money loses purchasing power over time—and if you’re only saving without investing, you’re likely falling behind. This is why strategic investing during inflation isn’t just smart—it’s essential.

But not all investments are created equal during inflationary periods. Some assets lose value quickly, while others hold steady or even grow in worth. The key is to place your money where it has a fighting chance of keeping up with, or outpacing, inflation.

In this article, we’ll explore smart places to invest during inflation—assets that tend to retain or grow in value when the economy gets tough.

1. Real Estate

Real estate is one of the most reliable inflation hedges over time. Property values often rise with inflation, and if you own rental property, you may also increase rent in line with rising costs—maintaining or even growing your income.

How to Get Started:

• Buy land or residential property in developing areas with growth potential. You can secure it and hold it if you’re not ready to develop yet. Depending on the location, you can lease it for farming or rent it out for parking and events.
• Consider short-let properties, student housing, or commercial rentals for income. Owning the land often offers more appreciation potential compared to buying a flat in a block or a condo unit.
• Even small-scale investments like joint real estate ventures or REITs (Real Estate Investment Trusts) can help you get in.

Always conduct due diligence, check title documents, and understand zoning laws or rent regulations in your area. For REITs, verify that the company is registered with the Securities and Exchange Commission (SEC) in your country (e.g., Nigeria’s SEC). Also, be wary of pyramid/Ponzi schemes.

2. Commodities: Gold and Other Precious Metals

Historically, gold has been considered a safe haven or store of value in times of economic uncertainty. When currencies weaken due to inflation, gold prices often rise.

Other Options:

• Silver, though more volatile than gold, also has significant industrial uses and can track inflation.
• Consider investing in jewelry, bullion (coins or bars), or digital gold through trusted platforms.

Keep in mind that physical gold must be stored securely (e.g., in a home or commercial safe) and insured against loss. Profit margins on resale can also vary due to premiums and market fluctuations.

3. Agricultural Investments

Agriculture offers both cash-flow and capital growth opportunities. As food prices rise, so does the value of producing it.

How to Invest:

• Buy farmland in areas with good access and fertile soil. You can lease it out or use it for planting. Since food prices typically increase with inflation, your income goes up accordingly, while you have the opportunity to increase your profit margin through inward integration (e.g., producing/recycling your farm inputs using an integrated farming model). The value of the land also appreciates over time.
• Partner with agribusinesses or cooperatives that offer fixed returns or shared profit models. Ensure they are licensed to offer their services before you engage.
• Consider investing in cash crops like oil palm, cashew, maize, or livestock like poultry.

Monitor risks such as weather, disease, and government policy. If you’re not hands-on, seek expert management. If you opt to do the farming yourself using farmhands, you can also leverage technology to monitor your farm and reduce theft.

4. Foreign Currency and Dollar-Denominated Assets

Inflation often hits domestic currencies hardest. Saving or investing in stable foreign currencies—especially USD, GBP, or EUR—can protect your wealth.

How to Participate:

• Open a domiciliary account and save in foreign currency, especially if some of your income (e.g., from side businesses or remittances) is in foreign currency.
• Buy dollar-denominated bonds or Eurobonds from credible institutions. These are often issued by governments or large corporations and provide returns in the specified foreign currency.
• Invest in foreign currency mutual funds or Exchange Traded Funds (ETFs) via licensed platforms.

Avoid unregulated forex trading or black-market currency schemes. Stick to legal, central bank-licensed channels (e.g., those approved by the Central Bank of Nigeria – CBN).

5. Treasury Inflation-Protected Securities (TIPS) & Bonds

While regular bonds may underperform during high inflation due to fixed interest payments, some government bonds are designed to adjust for inflation or offer returns that outperform most money market instruments.

Good Options:

• Treasury Bills (T-Bills) for short-term investing with moderate returns, often issued by the central bank.
• Sukuk bonds (Sharia-compliant bonds) or green bonds for ethical investing, often with government backing.
• Corporate bonds from blue-chip companies, though generally riskier than government bonds.

Look for bonds with interest rates that adjust with inflation (like Treasury Inflation-Protected Securities – TIPS in some markets) or those offered in foreign currencies to mitigate domestic inflation risk.

6. Income-Producing Digital Assets

This area is rapidly evolving, but certain digital assets have emerged as modern inflation hedges—if managed wisely.

Possible Assets:

• Dividend-paying stocks or ETFs in stable, well-established markets. These companies often have pricing power, allowing them to pass increased costs onto consumers and maintain profitability.
• Online businesses or digital products that can scale with low marginal costs (e.g., creating content for YouTube, selling e-books on Amazon KDP, designing merchandise for Amazon Merch on Demand, offering services on platforms like Fiverr or Upwork). These can provide passive or semi-passive income streams that can be adjusted for inflation.

Again, do your research and due diligence before you start. These are not “get rich quick” schemes. If you’re ready to put in the necessary effort, you will start to see results over time.

In inflationary times, inaction is also a choice—and often a costly one. While saving is vital, investing allows your money to grow or preserve its value.

But don’t invest blindly. Ask yourself:

• Can this asset produce income or grow in value?
• Is it backed by something real or meaningful?
• How easily can I exit or sell it if needed?

Diversify wisely. Hold cash for emergencies, but strategically move the rest into assets that work for you—even while prices rise.