What sectors and stocks do you think will do well during prolonged inflation? Or do you think prolonged inflation will not be a meaningful problem?
$FPI might be worth a look on this drop to $11. They missed on the top and bottom last week. I'd watch it, see if it goes below $10.
Basically anyone who has long term contracts for their inputs but short term or spot markets for their products benefits from inflation. If you just signed a 5 year contract with your union with 3% per year pay raises and your workforce accounts for most of your cost, but you sell the product those workers make into a spot market, then if inflation takes off your costs only rise at 3% while your profits rise at whatever inflation is. Of course this only works if it doesn't go too far out of whack and everyone just quits to go work for someone paying market. That said, if you really believe inflation will take off just short treasuries, because they strongly disagree. Either everyone who buys a treasury is dumb money, or the guys screaming about inflation are, you have to decide which.
People have already bought those stocks and driven them higher. ADM doubled since March 2020...BG tripled since the same time. And those were/are BORING stocks...Widows and orphan type of stocks!! The more labor...The bigger the problems...Think AT&T! Here is a list to look at...Many of these have risen already, but there could be a gem in amongst them... ADM BG COP KO RING HRL GOOD XOM EWC BRDCY BP ENB WY TEVA SLV PEO
no body said bitcoin per the trading economics website, US current inflation rate is %5.4... https://tradingeconomics.com/united-states/inflation-cpi
In my opinion, the best match for investors worried about inflation are Treasury inflation-protected securities, or TIPS. These securities carry a similar risk as other fixed income investments, but they add an adjusted principal amount if inflation increases. Other hedges to inflation include investing in real estate, gold and even cryptocurrencies. Real estate performs well because landlords and property owners see the values of their properties increase. Also landlords can somewhat easily pass-through rent increases. You can also pay attention to cryptocurrencies, however remember that this way of investing is full of risks and set the amount of investments in crypto for about 3-5%.
Take a look at what a TIPS is doing for you right now though, they're all giving negative yield. Short dated TIPS are giving you -5% negative yield!
Ya know, I have to laugh. As the market (once again lol) enters one of its "turmoil" phases, and all the overpaid Wall Street analysts out there agonize over the potential effects of inflation and higher interest rates on the average American consumer, debating and how they should play it, they miss the obvious. The fear and group-think kicks in, and all those bright little brains get so congested with all that data, they lose the ability to come in from the rain and see what's right under their noses: The consumer who could care less about the price of gasoline, groceries, interest rates, or any other damn thing. ----And the companies that cater to these folks. A long time ago I figured out something that had initially baffled me when I was young and learning stocks... the stocks of the luxury goods companies always seemed to go up in times of great uncertainty. Know why? It's because their clientele... doesn't give af. They keep spending money. Simple as that. So with that said, I won't go into the (unheard of) record numbers of $1M+ homes that have been built in the last two years, or the backlogs of two years plus going forward that the likes of high end builders such as Toll Bros spoke of on their last call, but I will go into what it takes to furnish those homes and it won't be bought at Big Lots or on Amazon. Restoration Hardware. It's my new favorite stock. They beat it way down and rest assured, my "Gucci" thesis above applies and the analysts have missed it. Especially now, after this boom in housing. As always, do your own DD. RH-->$391 -vz