Investing in the market can be stressful enough in good financial conditions. You have to be aware of your particular wants, needs, and risk tolerances to be comfortable with your strategy. However, when the economy is experiencing turmoil, investing can become even more stressful. Economic factors that can affect the markets include such things as unemployment rates, international economic happenings, and inflation rates. It could be the beginning of a long bear market so you need to have a smart strategy in place.
However, don't let economic fluctuations of these types completely discourage you. For example, there are companies that people can invest in that may not be as affected by high inflation as others.
The following are a few of these investment strategy options. You can do your research and even consult an expert advisor to find more beyond these 3 inflation investing pieces of advice.
1. Durable Consumer Goods Companies
Some companies manufacture goods that people simply can't do without. Regardless of high inflation, consumers will continue to purchase toilet paper, paper towels, facial tissue, and soap. These things nearly always make it into the household budget regardless of price. In addition, companies that produce non-perishable foods such as canned goods, standard condiments, and pasta are going to be less likely to feel the effects of inflation on their bottom lines.
Portfolio managers such as Larry Creel can assist in narrowing down the list of these companies. Expert advice comes in handy, as these professionals may have been through similar economic circumstances, and know which companies fared the best.
2. Healthcare Investment Trusts
Another item unlikely to get cut from the household budget is healthcare. While prices of medical care and procedures may raise during times of inflation, people are more likely to go ahead and spend their money on healthcare than, say, that new RV they have been eyeing. Those already undergoing treatment are not likely to discontinue treatment solely because prices go up.
In addition, healthcare and pharmaceutical companies will likely continue research and development projects during times of inflation. This fact makes them appealing options. Investing in trusts is a good way to spread the risk of investing out among several entities.
3. High-Quality Companies
Here again, is where the advice of an expert may come in handy. There are companies out there that have already weathered harsh economic conditions such as high inflation. Experts will recognize these companies and be able to steer you in their direction. Just because you have seen a bunch of their advertisements on TV or billboards doesn't ensure that a company is of high enough quality with which to invest during unstable times.
Utilizing an investment advisor who has weathered these storms before can serve you well in weathering the current climate.
Final Thoughts On Inflation Investing
Uncertain economic conditions such as periods of high inflation can make investors wary. However, it is rarely a good idea in any environment to cease investing at all. Instead, do your research and consult with experts to determine the best strategy for the market as it changes during inflation, stagflation, hyperinflation, or subsequent deflation.
While there are pitfalls to avoid in each situation, there are also options that can help you reach your long-term investment goals. Remember that investing is a marathon and not a sprint. Rome wasn't built in a day, and neither will your perfect profitable portfolio!
