Inflation is about to surge higher and could cause another stock market crash. Do you know which stocks to buy and which to avoid? I’m highlighting the best inflation stocks to buy and how to invest.
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In this video, I’ll show you why inflation is about to jump higher, why that could be a bad thing for stocks and what you can do to protect your money. We’ll look at the types of stocks that do best during higher inflation and then I’ll reveal five stocks to watch on double-digit inflation . In fact, three of these stocks, I’m adding to our 2022 Bow Tie Nation on portfolio.
I started warning about inflation back in May of last year, when the consumer price index was only up 4% for the year and everyone was saying higher prices were only ‘temporary’! A year later and consumer inflation has jumped to 8% but Nation, higher prices are about to get shockingly worse and every investor needs to be ready!
In reality, most of the time, you don’t have to worry about inflation affecting your stocks. Research by Hartford Funds on stock returns and inflation since 1973 breaks the market into four periods. When inflation is low, under 3% a year but rising, stock returns beat the inflation rate 90% of the time…so nothing to worry about. When inflation was high, so above 3% on a year-over-year basis but showing signs of coming down, stock returns still did pretty well, beating the inflation rate 76% of the time. When inflation was low, so under 3% and falling, here again, stocks ended up doing well, beating the inflation rate four-out-of-five years or 81% of the time.
It’s only when inflation is above 3% a year and rising, that’s when you have a problem and that’s when you need to worry about this. During those years, high inflation getting higher, which is exactly what we’re seeing how, stock returns were no better than a 50-50 roll of the dice.
Nation, we’ve been watching inflation run higher for almost a year now, so why am I saying things are about to get worse? Why is it NOW that I think higher prices could really accelerate and start hitting stocks?
One thing you need to understand is how important expectations are on inflation, the idea that once we start down that path of higher prices…people start to expect it and that actually pushes prices up even higher. If people think prices are going to keep rising, they ask for higher raises and they don’t pull back their spending when inflation hits. Nation, this can all become a vicious cycle of higher expectations feeding into higher inflation until we’re at double-digit price increases and it’s starting right now.
When the Consumer Price Index, the CPI, which is the main measure of consumer prices in the United States, when that is released on April 12th, it’s going to show the highest inflation since 1981…possibly as high as 10% on a year-over-year basis. You see how prices have already surged to 8% a year but that jump to double-digits is about to take this to a whole new level of panic.
0:00 How to Invest for Inflation
1:22 5 Stocks to Buy on High Inflation
2:47 Inflation and Stocks – History of How the Stock Market Reacts
7:57 Why Inflation is Increasing
12:58 Best Stock and Stock Sectors for Inflation
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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps….(read more)
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Love your video can you do a video on ggpi polestar merger, what's your take on polestar? Thanks
Interesting! Great analysis. You are my economic analysis guru and hopefully my wealth guru!
Great breakdown of stocks. Some good picks in there. Will definitely be keeping watch on your channel. Happy new subscriber here!
Thoughts on VUZI?
I got one thing from this video, I want that one mocha coca latte chino this week
That increase in grain prices could hit Kellogg's bottom line. The double whammy of grain and fuel pricing higher will affect every company that depends on constant delivery of bulk ag product.
Do a deep dive into BTE you'll like what you see
I really wish u would put your stock pics in the description…
Great analysis, EXCEPT…
Ukrain has NOTHING to do with gas prices, notta nill none
Joseph, thank you for being here to pass along your valuable knowledge and insight to our tiny brains.
Lets not blame the gas price increase on the Ukraine invasion Joe. That’s exactly what our democrat politicians did. The price was good way up before this due many of Biden’s policies.
,,Amazon is fantastic with a lucrative AWS and advertising ($30 billion and growing at 32%), delivers more than UPS.
_ Facebook is fantastic with a P/E 14 and $40b in profits that grows at 34%.
– Google is fantastic company with a lot of moat.
– Microsoft is fantastic with a lucrative Azure cloud and growing fast.
– Apple is a safe company that held its ground while other stocks fell.
– Wells Fargo
As an investing enthusiast, I often wonder how top level investors are able to become millionaires off investing. I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make decent returns
My advice to new investors: buy good companies and keep them as long as they are good companies. However, a severe market correction causes a lot of margin calls and sell-offs, driving the market lower. People get greedy in this bull market and it's extremely irresistible, fear of missing out to buy more stocks with borrowed money or money they don't have.
fire video as always.
Joseph, I have a question for you. Is there a trading platform for options that lets you trade at any price? The accounts I have only let you trade in .05 or .10 cent increments. If the mid-price is .43 for example, I would like to be able to place an order at that price. Thank you.
Buy LEVI… Good dividend yield. I will keep buying pants in any recession…
CPLie
go jabs
Mocha Coca lacha chino . Loved it !
i have positions in barrick and eagle gold mines, and i plan to add to them in the next month
These stock ideas might be a good choice if inflation was the primary/sole economic threat. However, there are already indications that GDP growth is being threatened as well, so the US may be faced with stagflation, and not just inflation.
I appreciate your information, have gotten much from it.
I am a fan of RYLD but wonder if there is any reason you can think against purchasing a very large amount, say 100k of RYLD?
Love you Joe! Thank you for taking care of all of us!
You'll have to buy one less Mocacoca Lattucino, lol, good one.
Glad I saw this. Investing has changed my perspective on how one can succeed in life. Working multiple jobs isn't the optimal way to attain financial freedom. Unfortunately, we found this out later in life.
Joseph, thank you very much for your time and efforts to keep us informed. Thank you very much for the great advices.
Nation inflation
Kind of a blanket question; but How do you feel about "TIP" stocks in these situations and do you personally own any.
Keep providing awesome content!
Excellent video sir. Please make a video on these stocks-Stoneco- Fintech from Brazil, Editas, UI Path and Quantumscape Thanks
Love the content and love the details. Thank you for sharing
Damn, Dems really know how to mess up a good thing. 2019 booming economy, 2021-22 brink of massive depression and currency collapse. What changed? Federal economic policy, confidence in the federal government, and negative investor forecasting due to those actions and policies.
I already own MPW and keep on adding…
Criminal sanctions for russians? What about criminal sanctions for the criminals on Wall Street!
Missed out on Twitter. It went up 20% after Musk bought into it. He made $600M on his purchase.
How about Penn stock under a dollar something affordable?