As inflation stages a resurgence, investors are being urged to rethink their portfolios and take proactive steps to shield their wealth from its eroding effects.
According to Nigel Green, CEO of deVere Group – one of the world’s largest independent financial advisory and asset management firms – inflation is no longer a distant concern, but an imminent and pressing threat.
A mix of global political and economic developments is accelerating the inflationary trend, says Green. These include:
• A second Trump presidency in the US – A likely return to infrastructure-heavy public spending and protectionist trade policies, including tariffs on imports, could inject fresh capital into the economy and drive up prices.
• The UK’s Labour government and its spending agenda – Increased public investment in housing, green energy, and public services may stimulate growth, but could also stoke inflation if not matched by productivity improvements.
• Middle Eastern instability – Ongoing geopolitical tensions are placing pressure on global energy supplies, raising input costs for manufacturing, transport, and utilities.
“These developments mean inflation isn’t a hypothetical threat—it’s an imminent reality,” Green warns. “Investors must act now.”
Despite its perceived safety, cash is highly vulnerable in an inflationary environment.
“Cash, while seen as secure, offers no real protection against rising prices,” Green says. “It’s like holding sand—it slips through your fingers.”
With inflation eating away at purchasing power, savers sitting on cash risk losing value in real terms, especially as interest rates begin to flatten or fall in response to economic headwinds.
In contrast, real estate continues to offer robust protection. Property is widely regarded as one of the most dependable inflation hedges – and for good reason:
• Capital appreciation – Property values tend to rise in line with inflation, and in many cases, outpace it.
• Rising rental income – As the cost of living increases, so too does demand for rental property, often pushing rents higher and boosting yields.
• Policy alignment – The Labour government’s focus on housebuilding and green infrastructure could stimulate demand, particularly for energy-efficient homes that meet stricter EPC standards.
“In an environment where inflation is heating up, property offers both income and long-term capital growth,” Green says.
While real estate is a cornerstone, Green advises investors to diversify their inflation defence strategy across multiple asset classes:
• Equities – Infrastructure, green energy, and defence sectors are likely to benefit from current policy trends in both the UK and US.
• Inflation-linked bonds – These provide a direct hedge by adjusting returns in line with inflation.
• Commodities – Tangible assets such as gold and energy tend to perform well when inflationary pressures rise.
“Sitting on cash in an inflationary environment is a losing game,” Green cautions. “Investors must pivot towards real assets and growth-focused sectors. Those who delay risk falling behind.”
As inflation continues to creep back into the global economy, the case for property – both as a safe store of value and a potential source of inflation-linked income – has rarely been stronger. For long-term investors, a diversified portfolio anchored by real estate may offer the resilience needed to weather the challenges ahead.
