One of the worst investments during inflation is cash. This is because as the general price level increases, the purchasing power of cash decreases
In other words, the same amount of money is able to buy fewer goods and services
Additionally, during times of inflation, interest rates may increase, which can make it more expensive to borrow money
This can lead to a decrease in the value of cash over time
Another investment that tends to perform poorly during inflation is bonds
This is because bonds typically offer a fixed rate of return, which means that the return may not keep up with inflation
For example, if a bond offers a 2% return and inflation is at 3%, the investor is actually losing purchasing power
Additionally, during times of inflation, interest rates may increase, which can lead to a decrease in the value of existing bonds