Gold and silver

Gold and silver nuggets on black background.
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The famous author is a long-time advocate of investing in precious metals. And it’s obvious why he’s still pounding the table on the two most popular ones: gold and silver.

Gold has helped investors preserve their wealth for centuries. It can’t be printed out of thin air like fiat money and its value is largely unaffected by economic events around the world.

Silver can also be a store of value and a hedge against inflation. Plus, silver is an industrial metal. It’s widely used in the production of solar panels and is also a critical component in many vehicles’ electrical control units.

You can buy physical gold and silver at your local bullion shop. Or, you can look at large-cap miners like Barrick Gold, Newmont, and Wheaton Precious Metals.

If gold and silver prices go up, these miners are very likely to thrive.

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Bitcoin and ethereum

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Some consider bitcoin to be the new gold. And Kiyosaki likes it, too.

When bitcoin surged past $60,000 in October, the author tweeted that the future of the cryptocurrency is “very bright,” but was just waiting for a dip before investing more.

Well, bitcoin has certainly pulled back since then, currently trading at roughly $47,660.

Kiyosaki is also buying ethereum. While ethereum isn’t as large or as popular as bitcoin, its usage in peer-to-peer lending, NFTs, gaming, and stablecoins means it’s something crypto investors shouldn’t ignore.

You can buy bitcoin and ethereum directly.

Today, many exchanges charge up to 4% in commission fees just to buy and sell crypto. But some investing apps charge 0%.

You can also invest in companies that have tied themselves to the crypto market.

HIVE Blockchain, for instance, mines both bitcoin and ethereum. The stock is up about 55% year to date.

There’s also Coinbase, which runs the largest cryptocurrency exchange in the U.S. With 7.4 million monthly transacting users, the company raked in revenue of $1.24 billion in Q3.

To be sure, Coinbase currently trades at $270 per share. But you can own a piece of the crypto exchange using a popular stock trading app that allows you to buy fractions of shares with as much money as you are willing to spend.

Real estate

Aerial View Of Industrial Commerce Office Buildings
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Owning real estate has historically been one of the most effective ways to both hedge against inflation and earn a passive income.

And these days, you don’t need to be a landlord to do it.

There are plenty of publicly traded real estate investment trusts that provide generous cash distributions to investors. These companies own income-producing real estate, collect rent from tenants, and then pass the money to shareholders in the form of regular dividends.

Realty Income, for instance, has been acquiring and managing commercial properties for over five decades. It earns rental revenue from long-term, net lease agreements and pays monthly dividends to investors.

You can look outside of the stock market, too.

For instance, some popular investing services let you lock in a steady rental income stream by investing in premium commercial real estate properties — from R&D campuses in San Jose to industrial e-commerce warehouses in Baltimore.

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Energy

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One of the surest signs of surging inflation is in the commodities rally we saw earlier this year. In fact, commodity prices are commonly believed to be a leading indicator of inflation.

So it shouldn’t come as a surprise that oil — the most traded commodity in the world — is also on Kiyosaki’s list.

The price of crude oil has slipped over the past month, but is still up more than 40% year to date.

As you’d expect, strong oil prices benefit oil producers. So far this year, investors have enjoyed outsized returns from names like Chevron (40%), Exxon Mobil (51%), and ConocoPhillips (84%).

That said, investing in commodities is a particularly volatile undertaking.

If you’d rather invest in something without the extreme ups and downs of stocks, cryptos and commodities, take a look at a few under-the-radar alternative assets.

Traditionally, investing in things like exotic vehicles or litigation finance or even marine finance have only been options for the ultra rich, like Kiyosaki.

But with the help of new platforms, these kinds of opportunities are now available to retail investors, too.

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

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About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

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