What to Add to Your Portfolio During these Inflationary Times
Inflation does not have to drown your money and wealth
Inflation does not have to drown your money and wealth
Thanks to the endless money supply and supply chain vow during the pandemic, inflation is around the world. Food, gas, and other commodity prices have skyrocketed. What should you add to your portfolio?
Bitcoin: I cannot express enough how much you need crypto during these times. Bitcoin is digital gold. In my view, Bitcoin is better than gold (which I will further discuss in another article). As the pandemic raged on and 2021 comes to an end, Bitcoin’s price has skyrocketed. Expect more money to pour into digital assets, especially Bitcoin. Bitcoin cannot be hacked and has a limited supply. It is also easy to buy and protect. I recommend that your portfolio have Bitcoin and other digital assets and digital asset related equities.
Tech: You are probably wondering why I am suggesting tech stocks during an inflationary period. During inflationary periods many are moving away from growth stocks and into value and dividend stocks. But do not turn your attention away from tech. Companies like the FAANGs (now MANGA) operate more like defensive tech companies. Because whatever crisis there is, whether it is a Pandemic, financial crisis, or inflation for this matter, everyone will do their searches on Google, binge watch on Netflix, shop on Amazon, connect with friends and family on Facebook, and use their iPhone. These companies are engrained in our everyday life. Outside of defensive tech, I would also recommend FinTech stocks like PayPal and Square. Given the massive sell-off on Black Friday, now is the time to go bargain hunting on some of your favorite tech stocks.
REITs: REITs are the best tool to have during inflation. As inflation spikes up, so does the value of land and real assets. My two favorite types of REITs are multifamily and industrial/warehouse REITs. I also like triple net lease REITs, given that many of the properties owned happen to have favorable tax structures, and many of the tenants tend to be single grocery stores/convenient stores/pharmacies/specialty retailers like 7-Eleven, Walgreens, and Autozone. I also like data center REITs. I am, in general, not a big fan of retail and hospitality REITs. Two retail REITs that I have spoken favorably of operate more or less like entertainment centers more than traditional shopping malls. Also look out for real estates and infrastructure investment firms like Blackstone and Brookfield. As a growth investor myself, I don’t hold REITs. I also prefer to own actual real estate. But if you want to protect your money from inflation, REITs are a good alternative to physical real estate assets.
Commodities: Commodity focus companies and ETFs are good investments during these inflationary times. As inflation causes commodity prices to increase, definitely look out for commodity companies and ETFs.
I, of course, do not include fixed-income products like TIPS. There are more tools you can use like TIPS and gold to counter inflation.
We are in some interesting times. According to experts, we are stuck with inflation till 2023. But do not let inflation affect your portfolio and money. Invest the right way, and you can see your wealth grow regardless of hard times.
What I say here is not investment advice. I write these for informational and educational purposes. Investing involves risk. Please consult a professional before investing.
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