Best stocks to insulate from inflation???

Question

obviously Proctor and Gamble / JNJ

also considering AUY, WMI, FSLR, DE

i'm thinking about overseas - our economy just has to tank - with all the wammy's it's getting

massive debt (private and gov't)

over printing of currency

fuel prices sky-rocketing

I expect double digit inflation pretty soon

What do you think about the economic situation and what do you think are some good hedges???

Answer 1

Public utilities, gold, natural resource stocks, TIPS (treasury inflation protection securities) and real estate are traditional hedges against inflation.  However one could argue that none of these look terribly attractive in light of recent gains.  Treasury I Bonds are quite attractive.  I believe the current 6 months floating yield is 6%(annual rate).  The higher the consumer price index, the greater the yield.  They are also tax deferred until cashed in and State tax exempt.

Answer 2

Well traditionally real estate as been a good hedge against inflation, but the real estate market is so bad that it would take some guts to start now.  I do think we will so some inflation down the road a little ways but I don't think double digits is around the corner.  I think it would be wise to invest in companies with overseas ties like you suggest.  I would also like agriculture plays in this environment.