In this video, we go over the 10 best investments to hedge against inflation. We go over:
1. Inflation Increasing Faster Than Expected
2. Why We Decided to go With Dividend Stocks for the Portfolio
3. 10 Dividend Stocks – Their Dividend History and Valuation
4. Portfolio Risk & Return Analysis
5. Expected Portfolio Returns
6. Investment Risks

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Now, inflation is the general rise in prices over time. Recently, both the CPI and PPI showed increases that were faster than expected. The current fear with high inflation is that it will force the Federal Reserve to lift interest rates. Higher rates increase the discount rate used to value a company’s free cash flows; this, in turn, reduces the current value of future profits, which brings stock valuations lower. Over the history of the financial markets, when inflation has hit 5% or more, we have seen negative returns from the stock market. However, companies that are dividend aristocrats continuously provide their investors with stable dividends year after year. This provides investors with a continuous stream of income. This is why we decided to go with dividend stocks for our investments.
We decided to go with the following 10 dividend stocks for our portfolio because they are a part of defensive and cyclical industries, which act as a great hedge against inflation. Furthermore, they are expected to continuously raise their dividends for the future. A majority of the companies we chose have stable credit ratings which provides investors with confidence to invest in them. Finally, the allocation of the portfolio was kept at an equal weight to provide a better risk and return analysis to investors.
First, we have Essex Property Trust, Inc. (ESS). Essex Property Trust is a real estate investment trust (REIT) which primarily owns and operates multifamily properties in California and the Pacific Northwest.
Second, we have Atmos Energy Corporation (ATO). Atmos Energy Corporation engages in the regulated natural gas distribution, and pipeline and storage businesses in the United States. This is a dividend aristocrat, increasing their dividend consecutively over the past 25+ years, which is a good sign because it means they were able to get past any recessions or periods of economic uncertainty, without it impacting the company’s dividend paying ability.
Third, we have Albemarle Corporation (ALB), which develops, manufactures, and markets engineered specialty chemicals worldwide. This is another Dividend Aristocrat.
Fourth, we have The Coca-Cola Company (KO), which is a beverage company which manufactures, markets, and sells various nonalcoholic beverages worldwide. They are a Dividend Aristocrat.
Fifth, we have Abbvie, which discovers, develops, manufactures, and sells pharmaceuticals worldwide.
Sixth, we have Roper Technologies, which designs and develops software and engineered products and solutions.
Seventh, we have Emerson Electric Co. (EMR) which designs and manufactures technology and engineering products for industrial, commercial, and consumer markets worldwide. This is another Dividend Aristocrat.
Eighth, we have The Clorox Company, which manufactures and markets consumer and professional products worldwide.
Ninth, we have American Tower Corporation (AMT) which is a REIT which owns and operates the largest independent portfolio of over 186,000 communication sites.
Last, we have Chevron Corporation (CVX), which engages in integrated energy, chemicals, and petroleum operations worldwide.
After forming this portfolio of 10 dividend stocks, we analyzed the risk and return metrics and compared it against the SPY.

Time Stamps
0:00 = Intro
0:50 = Rise of Inflation
1:29 = Why Dividend Stocks?
1:42 = 10 Dividend Stocks
6:27 = Portfolio Risk & Return Analysis
7:13 = Expected Portfolio Returns
7:40 = Investment Risks
8:20 = Outro

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DISCLAIMER: This video is for educational/entertainment purposes only. This is not any sort of financial advice. It is important to do your own research. The information set forth herein has been obtained or derived from sources generally available to the public and believed by the author(s) to be reliable, but the author(s) does not make any representation or warranty, express or implied, as to its accuracy or completeness. The information is not intended to be used as the basis of any investment decisions by any person or entity. This information does not constitute investment advice, nor is it an offer or a solicitation of an offer to buy or sell any security.

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