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Gold

Kiyosaki’s top pick is gold, which has a stellar track record of withstanding economic chaos. From 1974 to 2008, there were eight years when inflation in the U.S. was considered abnormally high. Gold prices surged an average of 14.9% year-over-year during these eight periods, according to research published in the Journal of Wealth Management.

Gold prices are also up over the past year. Every ounce of the yellow metal is worth roughly 6.8% more this year than last June, while inflation has been between 6% and 4% over that period. Simply put, gold has retained its value despite the cost of living crisis, which is precisely what it’s expected to do.

This is why gold serves as an anchor for portfolios built to maximize wealth protection.

More: How to invest in gold

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Silver

Silver is another favorite among concerned investors like Kiyosaki. In fact, silver outperformed gold during a historic wave of inflation half a century ago. During the 1970s, the price of silver surged 3,900%, while the stock market was up only 188% and gold was up 1,800%. This is why some have preferred silver over gold during periods of high inflation.

However, its potential outlook during a hard landing isn’t certain. Silver’s performance during recessions and economic pullbacks is mixed. In fact, the S&P 500 outperformed silver during five out of eight recessions since the 1970s.

Nevertheless, silver is on Kiyosaki’s list of “best insurance” during a hard landing and that could be a good reason to add it to your watch list too.

Bitcoin

Kiyosaki’s last pick is, perhaps, the trickiest. Bitcoin doesn’t have the track record of gold or silver since it was only launched after the Great Financial Crisis of 2008. Since then, of course, it has delivered a tremendous return for early adopters. Later adopters, however, have missed out.

Bitcoin is trading at nearly $27,000, which is more or less the same level it reached in late-2020. That means investors of Bitcoin have had a 0% total return for more than two and a half years. This underperformance is even more egregious when we consider the rise of inflation over that period.

Simply put, Bitcoin hasn’t proven to be an effective inflation hedge outside of the stock market. However, some believe it needs more time to deliver on its promise.

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About the Author

Vishesh Raisinghani

Vishesh Raisinghani

Freelance Writer

Vishesh Raisinghani is a freelance contributor at MoneyWise. He has been writing about financial markets and economics since 2014 - having covered family offices, private equity, real estate, cryptocurrencies, and tech stocks over that period. His work has appeared in Seeking Alpha, Motley Fool Canada, Motley Fool UK, Mergers & Acquisitions, National Post, Financial Post, and Yahoo Canada.

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