Government shutdowns, the dollar falling 11% in the first half of 2025, its fastest decline in 50 years, record numbers of lawsuits against the executive branch, and fears and fights over tariffs, stagflation, and the Federal Reserve’s independence.
It all speaks to political instability, which creates economic instability.
It doesn’t matter whether you identify politically as red, blue, purple, green, or polka-dotted, the U.S.—and much of the rest of the world—feels politically and economically unstable.
So how do you protect your money from political risk and instability?
1. Inflation-Resilient Investments
In January 2025, the CPI inflation rate was 3%. It fell to 2.3% in April, before steadily rising again to 2.9% in August (the last month available).
Anyone who thinks elevated inflation is beaten is deluding themselves. It remains a very real risk. The Federal Reserve acknowledged it even as they cut interest rates in September, opting to prioritize the job market over inflation.
Oh, and the devaluation of the dollar that I mentioned earlier? Consider that another huge red flag for inflation.
So, which investments defend your portfolio against inflation?
In a word, real assets (I guess that’s two words, but you get the idea).
Real estate, commodities, precious metals, and infrastructure do well during periods of high inflation:
Stocks don’t do badly either, although they don’t perform as well as real assets. Real assets have intrinsic value, so people just pay the going rate, whatever that is in today’s currency pricing.
I keep around half of my net worth in stocks and half in passive real estate investments, although I’m increasingly carving out some money for…