Inflation eats away at your money, so your 5% return is actually only 2%. The current inflation rate in the U.S. is 2.8%, still hovering at a high level.

Want to protect your wallet? These 5 investment types have the strongest inflation resistance:

**TIPS Bonds**: The principal is automatically adjusted based on the CPI, and the Vanguard-related funds rose by 3.4% in 2025. The downside is that it cannot fully cover faster-growing expenses such as rent and healthcare.

**Real Estate Trust ( REITs )**: When landlords raise rents, you can also get a share. From 2021 to 2024, the average annual rent increase in the U.S. is 7%, outpacing core inflation.

**Dividend Stocks**: A stable way to make money. Duke Energy, an American utility company, paid a dividend of $5.90 per share last year, with expectations of $6.32 this year and $6.72 next year, yielding a dividend rate of 3.5%, exceeding the average of the S&P 500.

**Commodities**: Gold prices have reached a historic high, currently at $3,041/ounce. The production costs of hard assets like crude oil and metals follow inflation, and the HGER commodity ETF performs more steadily than the S&P 500.

**Direct Purchase of Property**: Fixed-rate mortgages lock in monthly payments, and as property prices and rents rise, profits increase. However, be prepared for the psychological burden, as there are plenty of hassles such as maintenance and vacancies.

Core advice: Don't focus solely on one asset. A mixed allocation of TIPS, dividend stocks, commodities, and real estate is essential to truly hedge against inflation risks.