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Decolliber Decolliber is offline
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Join Date: Jan 2001
Location: Iowa
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Assuming interest rates correlate positively with the rate of inflation, you want to be in stocks whose underlying assets rise with (or even faster than) the rate of inflation. Historically, I think these have been business firms whose assets are "real" rather than financial (e.g., firms in primary products, such as agriculture, mining, and intermediate products such as steel, plastics, etc., rather than banking or other service industries). Manufacturing industries may or may not do well, depending on how inflation affects demand. In recent decades property has done well during inflation, even though high interest rates may raise the real cost of borrowing and hence hold down prices. The price of gold (and gold mining stocks) usually goes up rapidly during inflationary times, as some people lose confidence in currency. If you have an adjustable rate mortgage, pay it off quickly!
If you go to the Bureau of Labor Statistics web page you can get inflation data back to about 1900, and then look at, say, Value Line books (your local library) to see which stocks did best during inflationary periods.
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