As investors, we try to find investment vehicles that offer the greatest returns for some desired amount of risk. The particularly high levels of inflation have caused investors to compare the potential returns between government issued bonds, and various stocks. Bond yields are high, which will appear to generate higher returns for investors. However, the returns from these bonds become negative after inflation has been accounted for. Stockholders are in a similar position, as inflation is surpassing the returns that stockholders actually receive from dividend payments. The important difference between the two is that stocks can grow in value, thus boosting returns for investors. This potential for growth comes with increased risk, which must be factored into the comparison.

Which asset class would you invest in to keep up with inflation? What factors affected your decision?