Written by Joey Frenette at The Motley Fool Canada

Many TFSA investors have yet to invest excess amounts of money to exploit opportunities. Of course, you can subscribe to correction calls, but remember that higher inflation can dramatically reduce your purchasing power. The more money you hold, the less it will be worth – and at a seemingly accelerating rate, with Canadian inflation reaching 4.1%, which is the highest in about 18 years.

The inflation problems were seen as transitory. But what if it doesn’t? The trajectory of Canadian inflation is worrying. And it’s vital for TFSA investors to protect themselves in the event that we are faced with soaring inflation – a serious, though unlikely, outcome that affects all Canadians. Without a doubt, there have been many supply chain disruptions, shortages, etc. Whether it’s semi-trailers, sneakers or automobiles, it’s clear that prices could continue to rise in response to demand exceeding a limited supply.

Inflation could continue to weigh on TFSA investors

These goods could follow the path of lumber prices, which soared before collapsing before falling back to where they were before the surge. Given the complexity of the semi-finals, pent-up demand that might not be met any longer and of sorts, you shouldn’t expect a blown top – at least not anytime soon. Inflation is getting insidious and it is a topic of discussion ahead of the 2021 federal election in Canada. The cost of commodities could continue to rise, so it is critical to understand the growing risks of holding cash, a risk-free asset with increasing upside risk (or the risk of missing out on a rise if funds were invested in risky securities). ).

Without further ado, think Barrel gold (TSX: ABX) (NYSE: GOLD) – one of the best buys for TFSA investors to deal with higher inflation.

Barrick Gold: Fighting Inflation with Precious Metals

Barrick Gold is quite possibly one of the cheapest ways to fight inflation these days. Gold, which tends to outperform in times of soaring inflation, has slumped. Why? Probably because of the continued rise of cryptocurrencies like Bitcoin. The tightening of the US Federal Reserve could also have an unpredictable impact on gold prices.

The story continues

Looking ahead, I have no idea where gold is heading. No one does. Former Fed Chairman Ben Bernanke, one of the greatest economic minds of our time, doesn’t understand gold and thinks it’s hard to predict. He is right. There are too many variables to determine the next move for gold. Despite this, I favor gold as a magnificent TFSA hedge. It tends to fluctuate when the markets fluctuate, while also having a habit of holding its value in times of crisis.

Additionally, Barrick Gold, a well-managed miner, is a great way to get paid because you get all the benefits of holding gold in a wallet. The stock is posting a 1.9% dividend yield after its epic 40% drop from its highs.

With gold recently falling to US $ 1,750, as Bitcoin continued to gain strength, it looks like gold is destined to be eclipsed forever by cryptocurrencies. While cryptocurrency is a sexier asset class than gold, I still believe there are advantages to holding both assets as part of a diversified TFSA. I’d rather receive a near 2% dividend yield for owning Barrick stocks than speculating on the price of an unproductive asset, be it gold bullion or Bitcoin.

At the end of the line

After slipping another 4% on Thursday, TFSA investors should take a second look at crumbling Barrick stocks, as inflation soars.

The post TFSA Investors: Protect Your Wealth From Inflation With This Gold Stock was first published on The Motley Fool Canada.

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Foolish contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

2021