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Best Stocks to Buy in Periods of Inflation

Understanding how to hedge against inflation is a top priority for investors. Therefore, learning more about the best stocks to buy now is critical in helping you make well-informed decisions that will eventually pay off.

What Causes Inflation?

Inflation happens whenever there is a greater demand for goods and services than the available supply. The US inflation is happening due to several reasons. The first and primary contributor is the growth in Federal spending, which accelerated due to the Covid-19 pandemic. Additionally, factors are:

  • Supply and demand of the labor market.
  • Logistical constraints. “The Supply Chain” 
  • The surge in energy prices due to the Russian invasion of Ukraine.

Learning about the best stocks to buy now is key to overcoming these challenges.

Here is an overview of how to hedge against inflation with these stocks. 

1) ExxonMobil (Energy)

ExxonMobil is the largest energy company in the world and had an excellent 2021 performance, and it’s off to an even more fantastic start for 2022. Currently bullish on this stock due to the rising cost of energy prices, as shares for the energy market early up to 30% this year. 

ExxonMobil is well-positioned to handle an extended period of volatile oil prices in the market because of its size, scale, and combination of short-cycle and long-cycle projects. Also critically, due to it being the most significant energy company, it is HQ in America by market capitalization. The current Geopolitical situation makes Exxon well positioned to navigate the increasingly complex energy market due to the increasing sanctions on Russian energy companies.

The company’s history of disciplined investment and consistent returns for shareholders with stock buybacks and dividends is also a significant positive sign for analysts.

2) Procter & Gamble Co (Consumer Staples)

Another one of the best stocks to buy now is Procter &Gamble, as their shares continue to act as an inflation hedge in 2022. One of the main attractions of this stock is that it is well-positioned, even amid rising inflation fears and constrained logistics. The company benefits from selling many everyday staples, many of which are inelastic goods, meaning consumers have to purchase them for daily necessities. P&G is an excellent example of a boring yet lucrative business. For example, people still have to do laundry. 

3) United Health Group Inc. (Healthcare)

United Health Group is the largest healthcare company by market share and specializes in overseeing health insurance plans for business/employees and Medicare/Retirement sectors. As the Baby Boomer generation gets ready to retire, the largest group of American skilled/professional labor, this company is well-positioned to take advantage of the growing health insurance market and healthcare spending as a percentage of GDP getting closer to 20%. This company is also consolidating and growing its focus on IT healthcare. The company is currently attempting to acquire Change Healthcare, specializing in providing IT services to healthcare insurance companies, United’s main business. Although the company is still litigating the acquisition of Change Healthcare, anti-trust litigation takes considerable time to adjudicate. Therefore, the company is highly suited to navigate both the courts and the market.

The company’s growth outlook makes United Health’ one of the best stocks to buy.

How to Hedge Against Inflation

The rising cost of crude oil prices and asset price inflation will create significant challenges for investors. Learning tips on navigating the challenges of US inflation with the best stocks to buy now is essential in weathering these storms. Researching more about these stocks is always a worthwhile investment that can help you hedge against inflation. Ultimately, although necessary, a stock price doesn’t tell you all the information an investor needs. You want, no, you need the share count, which you have to be a subscriber. The share count allows you to concentrate and focus on your position. Which strengthens and grows your capital, all with our portfolio reducing single stock risk.

Posted: April 8, 2022

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