JPMorgan’s Jamie Dimon thinks investors are ignoring a real risk. Here’s what they can do to make their portfolios inflation-proof

“Asset prices are kind of high, credits are kind of low,” Dimon said. “There’s a lot of complacency in the market.” (1)

The stock market has been riding a wave of optimism, fuelled largely by hopes that inflation will keep falling and that central banks can cool prices without triggering a recession, something that economists call a “soft landing” (2). But Dimon is doubtful.

“Inflation is the skunk at the party,” he said. “It’s been coming down, but it seems to maybe have leveled off around 3%.”

Put simply, Dimon believes markets are underpricing a risk that hasn’t actually disappeared — it just hasn’t made headlines.

Why inflation matters for your portfolio

Dimon’s warning is noteworthy in that he’s talking about more than energy prices and supply chain disruptions.

“You can look at medical prices, construction prices, insurance prices, wages for certain things,” he said. “Inflation is a big thing. It’s not just oil.”

That’s a broader, stickier kind of inflation, and it’s harder to solve. Even though prices have fallen significantly from their 2022 peak of 8.0% in the U.S., inflation is still running above the U.S. Federal Reserve’s long-term target of 2%, according to World Data (3). The U.S. Consumer Price Index (CPI) has been sitting close to 3% year over year (4).

Why is that relevant to your portfolio, especially if you as a Canadian are invested in the American market? Because when inflation stays high for a prolonged period, the ripple effects are significant — interest rates stay higher for longer, borrowing costs rise, stock valuation comes under pressure and credit conditions tighten. Portfolios leaning heavily on stocks and bonds can struggle in this type of environment.

It’s exactly why Dimon’s warning is prompting investors to think harder about what else belongs in their investment mix.

Gold: A time-tested hedge against inflation

Gold has long been considered a store of value during periods of economic uncertainty and rising prices. Unlike stocks or bonds, it isn’t tied to corporate earnings or government debt — which is why investors often turn to it when inflation erodes the purchasing power of their dollar.

According to data from the World Gold Council, gold prices have increased about 8% annually on average since 1971, roughly matching long-term equity returns and outpacing bonds over the same period (5). After a strong 2025, gold has continued its run, trading at around US$5,004 an ounce in early 2026 (6).

For Canadian investors, gold exposure doesn’t have to mean buying physical bullion. Gold exchange-traded funds (ETFs) listed on the Toronto Stock Exchange (TSX) offer a simpler, lower-cost way to access it. For example, the iShares Gold Bullion ETF (TSX:CGL) tracks the spot price of gold and is hedged to the Canadian dollar — meaning you get gold price exposure without taking on U.S. dollar currency risk. According to BlackRock Canada, CGL is one of Canada’s largest and most liquid gold ETFs, with a management expense ratio (MER) of only 0.55% (7).

That being said, gold isn’t a perfect inflation hedge in every environment. Edward Jones Canada notes that while gold has historically acted as a hedge against large, unexpected spikes, a diversified stock portfolio can still provide meaningful inflation protection without holding precious metals, for investors with longer time horizons (8). For most people, a small allocation to gold — often cited in the 5% range — makes sense as part of a broader diversified portfolio, rather than as a standalone strategy.

Real estate: Another powerful hedge against rising prices

As prices continue to rise, property values and rents often follow. This is what makes real estate one of the most reliable inflation hedges available to investors.

When you own property, your asset tends to appreciate as the cost of building materials, labour and land increases. At the same time, rental income can be adjusted upward — even in provinces with rent increase caps, such as Ontario’s 2025 cap of 2.5% and British Columbia’s 3% cap, landlords can still adjust rents to partially keep pace with inflation (9).

Of course, directly owning rental property is only accessible to some investors. It requires significant upfront capital, ongoing maintenance and a hardiness for managing tenants and vacancies.

That’s where Real Estate Investment Trusts (REITs) can come into play. A REIT is a company that owns and operates income-generating properties such as apartment buildings, office buildings, shopping centres and industrial complexes and distributes most of its income to shareholders as regular dividend payments. Canadian REITs trade on the TSX, making them as easy to buy as a stock. According to Questrade, REITs offer exposure to real estate’s inflation-hedging benefits, like rising property values and income, without the need to own or manage a physical property (10).

For investors looking for broader real estate exposure without the hands-on commitment of property ownership, REITs are one of the most practical options available on the market.

Diversification matters most during times of uncertainty

Dimon’s warning about market complacency highlights something every long-term investor needs to keep in mind: no single asset class will protect you in every environment.

“We look at the broad range of outcomes,” he said in the Bloomberg interview.

That kind of thinking —planning for multiple scenarios rather than assuming the best — is the foundation of constructing a smart portfolio, one that spreads risk across asset classes that don’t all move in the same direction at the same time. When stocks struggle, bonds or gold may rise. When inflation hits, real estate and commodities may provide a buffer.

Keeping equity market expectations in perspective is also important. Goldman Sachs is currently forecasting only 3% annual returns from U.S. equities over the next decade (11). This suggests that relying solely on stock market returns may not be enough to build or protect wealth over the long haul.