An inflation hedge is an investment intended to protect the investor against—hedge—a decrease in the purchasing power of money—inflation.
There is no investment known to be a successful hedge in all inflationary environments, just as there is no asset class guaranteed to increase in value in non-inflationary times.
[1] Inflation can impact investment decisions by making it difficult to predict future prices.
This is why it is important for investors to consider inflation when making investment decisions.
[2] Barron's Finance & Investment Handbook states: "Traditionally, gold and real estate have a reputation as good inflation hedges, though growth in stocks also can offset inflation in the long run.