To The Moon

Inflation in the US has now exceeded 8% and countries like Singapore have not been spared. Many investors on Tiger likely invest in both SG and US markets hence inflation has likely already hit your portfolio. Investors are also now looking for greater returns (and discount rates) in order for their capital gains to exceed inflation levels, creating a downward spiral in stock prices. While inflation looks scary, investors can actually mitigate this. 

Inflation Proof Industries 

First, you can look for industries that can hold upbetter during inflation, notably those with pricing powers to increase the cost of their goods. Consumer staples would be a good industry as they consist of necessities that consumers cannot forgo even if prices are raised. Hence companies in this industry have considerably higher pricing power.

Global Markets

Look beyond US and Europe. Not all regions are facing equally bad inflation that is scarring consumers away. Consequently, these nations would also likely fare better in a following recession. Gountries like China and Japan have inflation below 2% now and these could be interesting markets to deploy cash in. However, there are risks in investing in each country hence investors should do their own due diligence too.

Source: Pew Research

In all, these are just general advice to beat inflation. Investors should continue to conduct deep analysis on the businesses they are interested in and ascertain if they have pricing power, the ability to reduce costs or if they are negatively impacted by supply shocks today. All these will help you to determine how strong a company is in weathering todays investing climate.

If you enjoy reading this post do give me a like &follow for more macro and company specific updates!