Summary
- Inflation erodes purchasing power, making it crucial to invest in equities, which historically outperform cash over the long term despite volatility.
- My thesis is that inflation will stay “higher for longer” due to factors like energy costs, labor market tightness, and deglobalization.
- To combat inflation, I recommend investing in sectors with strong pricing power like energy and real estate, which have historically outperformed during inflationary periods.
- The biggest risk to my thesis is a sudden decline in inflation, which could cause energy stocks to underperform, though REITs might still do well.
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Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair. – Unknown
Introduction
Inflation is a silent killer.
In fact, inflation is the reason why I often make the
Analyst’s Disclosure: I/we have a beneficial long position in the shares of CNQ, TPL, LB, AM, REXR, EXR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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