March 16, 2022

What Can The Average Investor Do At This Point? 

II hate saying it.

 

But I’m sure you’d rather us be brutally honest.

 

Or, we can lie and tell you everything is just terrific, as we tip-toe through the daisies.

 

Inflation could get worse before it gets better.  

 

The Consumer Price Index just jumped 7.9% in February – its biggest jump since January 1982, according to the U.S. Labor Department.  In addition, according to Moody’s Analytics, the average household is paying an additional $296 a month.

 

Even the Producer Price Index was up 10% year over year.

 

Sure, the Federal Reserve is expected to hike rates a quarter point this week.

 

However, we have to consider that, one, it’ll take some time for Fed action to curb inflation.  

 

Two, there’s uncertainty regarding the war in Ukraine. 

 

Three, “When the Fed does lift rates, it’s also likely that people will see the downsides of those increases before any improvement on inflation,” said Tara Sinclair, a senior fellow at the Indeed Hiring Lab, as quoted by CNBC.

 

“Basically, that means consumers may have to pay more to borrow money and still see higher prices at the gas pump and grocery store. That scenario is particularly tough on low-income workers, who have seen wages rise but not keep pace with inflation,” added CNBC.

 

At the same time, how aggressive can the Fed be without tipping us into recession?

 

So, what can the average investor do at this point?

 

We can always hope the Fed gets it right.  Or, we can invest in higher-yielding stocks that are often insulated from sky-high inflation, like Income Confidential does.

 

In fact, its approach allows “us to move assets to collect cash in both inflationary, or deflationary environments. For example, part of our port- folio is currently weighted in sectors of the economy that benefit from rising prices including energy, healthcare and private equity lending. We call these sectors “inflation beneficiaries and include oil and gas, coal, oil tankers, dry bulk shipping, medical and industrial space, tobacco, copper, iron ore, senior housing, long-term care, hospitality services, and hybrid financials involved in private equity lending.”

 

One of those stocks – BlackRock Resources & Commodities Strategies (BCX) – recommended in May 2021 is up slightly and currently carries a dividend yield of about 5.5%.

 

Inflation isn’t going to disappear overnight.  So, protect your portfolio and invest wisely with high-yielding opportunities.  

 

Markets

 

The Dow is up 374 points to 33,801

The S&P 500 is up about 54 points to 4,307

The NASDAQ is up 247 points to 13,696.50

Gold prices are up $8.20 to $1,926.23

Bitcoin is up about 5% to $40,537.41

Oil prices are up slightly to $96.49

The VIX is down 3.23 points to 28.52

 

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