what stock benefit from inflation

7 Stocks to Buy That Will Benefit From Inflation

1. Barrick Gold (NYSE:GOLD)
2. Freeport-McMoRan (NYSE:FCX)
3. SoFi Technologies (NASDAQ:SOFI)
4. Visa (NYSE:V)
5. Advanced Micro Devices (NASDAQ:AMD)
6. West Fraser Timber (NYSE:WFG)
7. Beyond Meat (NASDAQ:BYND)

Full Answer

What are the best stocks to invest during the inflation?

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What is the best investment to hedge inflation?

“Hard assets generally make the best inflation hedges. Investments like gold, silver, and real estate can hold up very well in inflationary environments. Commodity producers can also perform very well, but may face temporary headwinds if there is a recession in the United States.

Which equity sectors can combat higher inflation?

Will Bradwell, portfolio manager in the Franklin UK Equity team, picked insurance firm Phoenix Group. Although most would traditionally associate inflation and interest rates with banks, he said the lagging insurance sector could also work as play against higher prices.

Do stocks rise with inflation?

While stocks, in general, fare better than bonds during periods of high inflation, our theme of Inflation Stocks includes companies from the banking, insurance, consumer staples, and energy sector that could be more likely to benefit from high inflation and possibly higher interest rates.

What are the narratives of inflation?

There are two narratives that are getting conflated when it comes to inflation. The first is whether or not inflation is occurring. And the second is whether inflation will get out of control.

Will hotel stocks drop in 2020?

Like any group of stocks related to travel and tourism, hotel stocks saw a steep drop in share prices in 2020. The leisure and hospitality sector that once had 15 million employees has lost 4 million jobs since February.#N#Many major cities will be feeling the ripple effects of the Covid-19 pandemic for years. However, there is ample evidence that shows the pandemic may be coming to an end. The number of new cases is dropping. The number of those getting vaccinated is rising. And even in the cities with the most restrictive mitigation measures, the slow process of reopening is beginning.#N#All of this can’t come fast enough for individuals who rely on the travel and tourism industry for their livelihood. Hotel chains had at least some revenue coming in the door. And when earnings season concludes, the more budget-friendly hotel chains may realize revenue that is 75% of its 2019 numbers. But that is not enough to bring the hotels to anywhere near full employment. Particularly with hotels that have bars and restaurants that have remained closed or open at limited capacity.#N#Many economists are optimistic that travel may begin to look more normal by the summer of this year. And the global economy may deliver 6.4% GDP growth this year. With that in mind, the hotel chains with the best fundamentals and the broadest footprint will be in the best position as the economy reopens.

What happens if inflation continues to accelerate?

If inflation continues to accelerate, then you can bet interest rates will follow. And higher interest rates (i.e. a higher discount rate) could mean lower stock market values. For stock investors who have grown accustomed to the market’s big gains over the past year, higher inflation is a wake-up call.

Why are stocks valued based on discounted cash flow?

The discount rate used in this equation is prevailing interest rates, which are still near record lows, but rising fast. If inflation continues to accelerate, then you can bet interest rates will follow.

What is the Fed's easy money policy?

In fact, the Fed’s easy money policies in recent years, and especially since the pandemic, have been geared toward two things: Keeping interest rates lower for longer to stimulate the economy and …. Producing MORE inflation. The Fed is on record saying that they want inflation above 2%.

Is the Fed's wish sooner than expected?

It indicates that the Fed may be granted its wish much sooner than expected. The U.S. Producer Price Index (PPI), for example, has risen for the last nine months in a row, posting a 5% year-over-year increase in January. Granted, PPI is rebounding from a deep pandemic-induced hole early in 2020.

Is inflation a problem for the stock market?

Suddenly, it seems, inflation could be a problem for the stock market. Perhaps it is hard to believe that inflation could be the thing that finally spoils this stock market party. After all, since the early 2000s, and especially since the global financial crisis in 2008, deflation has been the bigger fear—as in too little economic growth ...