It’s the only asset class with a history of “earning more than inflation” – here are 3 easy ways to gain exposure for the rest of 2022


Suze Orman: This is the only asset class with a track record of “earning more than inflation” – here are 3 easy ways to gain exposure for the rest of 2022

Whether inflation persists or we’re heading into a bear market, personal finance expert Suze Orman says you should always rely on equities for the long term.

“Over the long term, equities have produced the best gains after controlling for inflation,” Orman writes in a blog post. “Bonds and cash are struggling to keep pace with inflation; only equities have a track record of gains above inflation.

Orman’s advice is sound. But some sectors of the stock market perform better than others during times of high inflation.

Whether you’re looking to invest thousands of dollars or just a little savings, the following three sectors could give you an extra boost for the rest of 2022.

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1. Banks

In her blog postOrman says investors need to be prepared for stocks to go through periods when their value declines.

But it also offers the opportunity to acquire more high-end stocks at bargain prices. When the next pullback happens (and it will), there’s one place investors might want to turn first: the banks.

Unlike the vast majority of other industries, banks do well when the Fed tightens due to their asset-sensitive nature. When interest rates rise, bank assets such as bonds and loans tend to climb higher than their liabilities such as deposits.

Rising rates also mean banks can earn a wider spread between what they pay in interest on savings accounts and what they earn from Treasury bills.

Another great thing about buy bank stocks it’s a bit like shooting fish in a barrel.

Just choose two or three of the biggest banks in the country, like Bank of America, Citigroup and Wells Fargo, and you should have all the positive exposure to rising interest rates you need.

2. Insurance

Even when people cut their budgets to help offset rising prices, we know those auto and life insurance premiums will continue to rise no matter what.

Which means that while insurance may not be the most exciting industry, it is a defensive business that can provide ample portfolio protection, especially since insurers generally earn better returns. on their “float” when rates rise.

And on top of that, insurers often pay dividends to their shareholders, which means you can count on a little extra cash a few times a year.

For those looking to invest in insurance, Chubb, Allstate and MetLife are some of the big names in the industry.

3. Precious metals

When it comes to investing in precious metals, these stock picks can be worth their weight in gold.

Gold and silver have long been considered safe-haven assets, which means that when all else fails, their value doesn’t really tarnish.

You can still buy precious metal bullion or coins, but mining stocks and ETFs allow you to invest in space at low cost and without needing to find storage.

Additionally, large diversified mining companies like Rio Tinto and Freeport-McMoRan also mine metals like copper, which is currently seeing booming demand due to its role in the production of electric vehicles.

Historically, the best time to make money from metals is when inflation is about to keep rising – like right now.

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