{"id":185169,"date":"2025-10-13T10:08:57","date_gmt":"2025-10-13T16:08:57","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=185169"},"modified":"2025-10-13T10:10:07","modified_gmt":"2025-10-13T16:10:07","slug":"five-ways-to-protect-wealth-from-political-risk","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/five-ways-to-protect-wealth-from-political-risk","title":{"rendered":"5 Ways to Hedge Your Money Against Political Risk"},"content":{"rendered":"\n

Government<\/span> shutdowns, the dollar falling <\/span>11% in the first half of 2025<\/span><\/a>, <\/span>its fastest decline in 50 years<\/span>, <\/span>record numbers of <\/span>lawsuits against the executive branch<\/span><\/a>, and fears and fights over tariffs, stagflation, and the <\/span>Federal Reserve\u2019s independence<\/span><\/a>.<\/span> <\/span><\/p>\n\n\n\n

It all speaks to political instability, which creates economic instability. <\/span><\/p>\n\n\n\n

It doesn\u2019t matter whether you identify politically as red, blue, purple, green, or polka-dotted, the U.S.\u2014and much of the rest of the world\u2014feels politically and economically unstable. <\/span><\/p>\n\n\n\n

So how do you protect your money from political risk and instability? <\/span><\/p>\n\n\n\n

1. Inflation-Resilient Investments<\/span><\/h2>\n\n\n\n

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). <\/span><\/p>\n\n\n\n

Anyone who thinks elevated inflation <\/span>is beaten<\/span> is deluding themselves. It remains a very real risk. The <\/span>Federal Reserve acknowledged it<\/span><\/a> even as they cut interest rates in September, opting to prioritize the job market over inflation. <\/span><\/p>\n\n\n\n

Oh, and the devaluation of the dollar that I mentioned earlier? Consider that another huge red flag for inflation. <\/span><\/p>\n\n\n\n

So, which investments defend your portfolio against inflation? <\/span><\/p>\n\n\n\n

In a word, <\/span>real<\/span> assets (I guess that\u2019s two words, but you get the idea). <\/span><\/p>\n\n\n\n

Real estate, commodities, precious metals, and infrastructure <\/span>do well during periods of high inflation<\/span><\/a>:<\/span><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Stocks don\u2019t do badly either, although they don\u2019t perform as well as <\/span>real<\/span> assets. <\/span>Real<\/span> assets have intrinsic value, so people <\/span>just<\/span> pay the going rate, whatever that is in today\u2019s currency pricing.<\/span><\/p>\n\n\n\n

I keep around half of my net worth in stocks and half in <\/span>passive real estate investments<\/span><\/a>, although I\u2019m increasingly carving out some money for precious metals. <\/span><\/p>\n\n\n\n

2. Recession-Resilient Investments<\/span><\/h2>\n\n\n\n

You think Congress did the economy any favors by letting the government shut down? Workers sitting around twiddling their thumbs hardly creates a booming economy. <\/span><\/p>\n\n\n\n

Oh, and we had a shrinking job market <\/span>before <\/span><\/em>the shutdown. Job openings have <\/span>steadily fallen for months now<\/span><\/a>, and last month saw negative job growth. <\/span><\/p>\n\n\n\n

I\u2019ve written about <\/span>recession-resilient real estate investments<\/span><\/a>. In the co-investing club that I invest through, we\u2019ve vetted and gone in on many recession-resilient investments over the last year, including:<\/span><\/p>\n\n\n\n