Inflation is as fierce as a tiger!

At present, inflation is developing at an alarming rate in the United States and even around the world. Us CPI rose 1.7 per cent from a year earlier in February to 7 per cent in December, the fastest pace since 1982.

Inflation is not only the focus of ordinary people's daily life, it has become an indicator that the Federal Reserve pays close attention to all the time, but also a risk factor that investors must consider.

Wall Street investors believe that inflation will remain a major obstacle to the stock market in 2022, according to a CNBC survey. The data show that at present, more than 50% of the countries in the world have an inflation rate of more than 5%, entering a period of high inflation.

Against the backdrop of high inflation, demand for investment in the inflation-linked secondary market has surged, and investors want to hedge against rising prices. So, how should investors invest? Which industry sectors can fight inflation?

1. ETF betting on rising inflation

ETF, a theme related to "inflation", attracted a lot of money at the beginning of the year. At the same time, some of the same type of ETF are speeding up the pace of listing.

Listed in December last year, named directly after the producer Price Index (PPI).$AXS ASTORIA INFLATION SENSITIVE ETF (PPI.US) $It was recorded this year.7%The rate of increase.

All ETF with the word "inflation" in its name or ETF description recorded inflows last year, according to data compiled by Bloomberg.

Four of the ETF's returns exceeded the latest CPI reading of 7 per cent in 2021. They are:

• $VanEck Vectors Real Asset Allocation ETF (RAAX.US) $，21.56% in 2021 and 2.9% so far this year

• $HORIZON KINETICS INFLATION BENEFICIARIES ETF (INFL.US) $，Up 24.76% in 2021 and 1.19% so far this year

• $FIDELITY STOCKS FOR INFLATION ETF (FCPI.US) $，It rose 34.19% in 2021 and 0.56% so far this year.

• $ProShares inflation expectations ETF (RINF.US) $，It rose 16.21% in 2021 and is down 3.38% so far this year.

2. Stocks that are expected to resist rising inflation

Although stock markets generally underperform in the face of high inflation, there are still profit opportunities in individual sectors at the industry level. Some fund managers have pointed out that some sectors that benefit from rising prices and profits will benefit relatively under inflation expectations:

First of all, pay attention to offensive assets, that is, a kind of assets in which the price of the product can rise and the gross profit margin can expand.Secondly, pay attention to defensive assets, we can look for assets with high dividend yield and good stability of dividend rate in the market, and offset the upward pressure of real interest rate through the strategy of high dividend yield, so as to maintain the stability of the portfolio.

Generally speaking, commodities, agricultural products, financial stocks and real estate are the beneficiaries of the upward phase of inflation.

(1) Nonferrous metals

铝：

• $Alcoa (AA.US) $、$Aluminum Corporation Of China Ltd (ACH.US) $

• Century Aluminum (CENX.US) $、$Caesar Aluminum (KALU.US) $

铜：

• $McMoran Gold (FCX.US) $、$Southern Copper (SCCO.US) $

• $Hudbay Minerals (HBM.US) $

• $Turquoise Hill Resources (TRQ.US) $

Gold:

• $Newman Mining (NEM.US) $、$Barrick Gold (GOLD.US) $

• $SPDR Gold ETF (GLD.US) $
  

(2) Oil and gas plate

Petroleum:

• $Exxon Mobil Corp (XOM.US) $、$Chevron Corp (CVX.US) $

• $ConocoPhillips (COP.US) $、$BP P.L.C. (BP.US) $

• $EOG Energy (EOG.US) $、Vanguard Natural Resources (PXD.US) $

• $Marathon Oil (MRO.US) $

Natural gas:

• $Williams (WMB.US) $、$Amenon (AEE.US) $

(3) Coal plate

• $Azi Coal (ARCH.US) $

• $Peabody Energy Corporation (BTU.US) $

• $Alliance Resource Partners LP (ARLP.US) $

• $Natural Resource Partners LP (NRP.US) $

(4) Agricultural products

• $Tyson Foods (TSN.US) $、$Bunge (BG.US) $

• $Dole Food (DOLE.US) $

• $Archer Daniels Midland (ADM.US) $

• $Cal-Maine Foods (CALM.US) $

(5) Financial industry

• $Wells Fargo & Co (WFC.US) $、$HSBC Holdings PLC (HSBC.US) $
  

• UBS (UBS.US) $、$Citigroup Inc (C.US) $
  

• $Bank of America Corporation (BAC.US) $、Barclays Bank (BCS.US) $
  

• $JPMorgan Chase & Co (JPM.US) $、$Morgan Stanley (MS.US) $
  

(6) High dividend assets

• $Vale SA (VALE.US) $、$Petroleo Brasileiro SA Petrobras (PBR.US) $
  

• $Rio Tinto PLC (RIO.US) $、$BHP Group Ltd (BBL.US) $

Buffett teaches you how to fight inflation

In a letter to shareholders in 1981, Buffett mentioned that two types of companies acquired by his Berkshire Hathaway had bright results, one of which happened to be well adapted to the inflationary environment. Such enterprises must have two characteristics:

• (1) the ability to raise prices easily without worrying about a significant decline in market share and unit output (even when product demand is stable and production capacity is not fully utilized)

• (2) the ability to reconcile a significant increase in corporate output (more due to inflation than real growth) with less need for additional capital investment.

Buffett thinksWhether a company needs a lot of money to maintain its operation and profitability is an indicator that investors should pay close attention to.而The ability of an enterprise to price its goods is the primary indicator used to evaluate the company's business.If a company can raise the price without losing customers, it is doing well.

Last,Investors also need to pay attention to whether a company needs to rely on loans to keep growing.After all, high inflation is bound to lead to higher interest rates. As a result, growth companies that often borrow to achieve growth are more vulnerable.