“Heretic” Adam Grossman Warns Retirees that Stocks Beat Gold and TIPS for Inflation Protection.

Adam Grossman has a contrarian message for retirees and income-focused investors who reach for gold or Treasury Inflation-Protected Securities when prices start climbing: the better hedge has been sitting in their equity portfolios all along. Speaking on Morningstar’s The Long View podcast in a segment titled “Adam Grossman: Asset Allocation Is an Investor’s Best Defense,” Grossman laid out a case that cuts against decades of conventional wisdom about inflation protection.

His thesis lands at a moment when the question is anything but academic. Headline PCE inflation accelerated to 3.77% year-over-year in April 2026, up from 2.86% as recently as February, and the Consumer Price Index reached 332.4, sitting in the 90th percentile of its trailing 12-month range. Real consumer prices are climbing again, and investors are once more asking which assets actually keep up.

The Case for Stocks: Pricing Power Is the Hedge

Grossman’s argument is grounded in something every shopper has noticed at the checkout line. “In my view, actually, I think stocks are the best way to protect against inflation,” he said. “We’ve all seen this, you know, say at the grocery store where you’ve seen the companies have been very, very effective at pushing through price increases.”

The logic is straightforward. When companies can raise prices faster than their input costs rise, profit margins hold, earnings hold, and equity values track right along with the price level. The recent corporate profit data backs this up. Total corporate profits hit $4,392.5 billion in the first quarter of 2026, up 12% year-over-year and roughly 0.9% from the prior quarter. That figure has climbed steadily through a 12-month period in which inflation has only accelerated, which is precisely the kind of empirical fingerprint Grossman’s pricing-power argument predicts.

For readers who want the source data behind aggregate corporate profitability, the Bureau of Economic Analysis publishes the underlying tables directly at bea.gov.

Why TIPS Disappointed

Treasury Inflation-Protected Securities are supposed to be the textbook answer here. Their principal adjusts with CPI. And yet they fell short during the 2022 inflation surge. Grossman’s explanation is mechanical: “they are still bonds” and “were dragged down by the overall effective interest rates.”

The current environment illustrates the problem. The 10-year Treasury yield sits at 4.45% as of late May 2026, after ranging from 3.97% to 4.67% over the past year. Real yields on the 10-year TIPS now run 2.07%, with the 30-year at 2.71%. Inflation-linked principal helps on one side of the ledger, but when nominal yields rise, bond prices fall, and TIPS holders feel that pain regardless of how the CPI adjustment goes.

The Gold Heresy

Grossman’s most contrarian claim involves the asset class most people instinctively associate with inflation protection. He calls the data supporting gold as an inflation hedge “pretty weak,” acknowledging that “some people consider that heresy.” He doubles down anyway: “gold bugs, they just can’t see that there’s another point of view.”

He grants gold’s appeal as something “tangible, unlike fiat currency,” but insists investors “have to look at the numbers and look how it’s performed during periods of inflation.” Co-host Amy Arnott concurred, noting that “the data is very mixed where there are some inflation periods when it did really well, but other periods not at all.”

The Meta-Lesson for Investors

The broader takeaway in Grossman’s framework has less to do with any single asset class and more to do with how investors evaluate them. Popular narratives about inflation hedges have outrun the historical evidence in some cases, particularly with gold. Stocks, often viewed as the risky part of a retirement portfolio, may quietly do more inflation-protection work than the assets explicitly marketed for the job.

What to watch from here: whether the recent acceleration in headline PCE, driven largely by energy prices running at 18.26% year-over-year, persists into the second half of 2026, and whether corporate margins continue to absorb input costs the way Grossman’s grocery-store example suggests they have.