Steps To Take Now As Inflation Rises
Over the last several weeks I’ve warned of the negative effects of inflation rising and that you need to begin protecting yourself…
You can see one of these articles below…
And it’s not just coming anymore… It’s here.
Prices on almost all commodities – iron, steel, oil, lumber, etc. – are up huge in the last few months.
Here’s the chart for lumber…
The skyrocketing price of lumber is now adding more than $25,000 in extra costs to every new home built.
Which is one of the reason homes prices are skyrocketing at all time high rates right now.
And these increased costs for companies are already leading them to raise prices.
So far dozens of companies have either announced price increases on products they sell… Or plan to increase prices by the summer.
Kimberly Clark announced that it will raise prices via a press release on some of its baby, beauty, adult care, and toilet paper products due to higher costs its already dealing with due to inflation.
Manufacturing behemoth 3M has flagged rising air and freight costs to ship its goods, while Walmart has warned on the congestion in US ports.
Mobile home manufacturer Legacy Homes and Williams-Sonoma, the purveyor of Breville espresso machines and Wüsthof knife sets, have seen an uptick in wage costs.
And Barbie Doll-maker Mattel has warned on the rise in plastics prices, which were exacerbated by the winter storm in Texas that took petrochemicals plants offline.
“Costs are going up everywhere,” said Ted Doheny, chief executive of packaging maker Sealed Air. “It’s DefCon 4 [for] us right now. It’s a big deal.”
These first flickers of inflation — and the fact that many S&P 500 companies say they are responding by raising their own prices — have fed a debate among investors as the US economic recovery accelerates. Are these a signal that the kind of chronic inflation long ago tamed by the US central bank could be about to roar back?
These quotes and info are from The Financial Times.
Here’s what I said about this a couple week ago…
When companies’ prices – say the shipping costs 3M mentions – rise… The companies typically pass those extra costs onto you and I as the consumer in terms of higher prices on the goods and services they sell.
Not only is your money worth less over time due to inflation… But things cost more as well because companies raise their prices to make up for increased expenses on their part.
Inflation is a double-edged sword with multiple bad effects for you and I.
Companies are already seeing these costs rise. And we’re only at the beginning of whatever it to come.
Now we’re further into that process and the latest inflation numbers came out that showed large increases in inflation in certain industries.
According to the U.S. Labor Department – the consumer price index (CPI) jumped 2.6% in March from the same period last year. And this is already a massive increase from the 1.7% recorded in February.
This was led by gas prices rising 9.1% in March… And this led to an overall 13.2% increase in all energy prices in March.
Food prices are up 3.5% over this time last year.
Which led to a 5.4% increase in prices for things like meat, poultry, fish, and eggs.
And even led to a 6.5% increase in food prices at restaurants, for takeout, and for delivery.
While “overall” prices “only” jumped 2.6% in the last year… Individual prices of commodities are rising rapidly as you can see above.
This means greater inflation is coming soon because the overall CPI index usually lags the individual price increases.
What should you do to combat this?
With any extra money you can generate, make sure you’re invested in great stocks that have the following traits…
- They’re cheap.
- They have little to no debt compared to a lot of cash.
- They produce large profits and cash flows.
- They pay dividends.
- And make sure they aren’t in industries that could be hammered by Covid.
These kinds of stocks – the ones I try to find for you every day – are things you should continue investing in because they will provide you good to great returns no matter what the market is doing.
All while protecting you from the major risks like valuation, unemployment, debt, and inflation.
Here are some of those stocks I’ve recently found for you to consider investing in to protect your portfolio…
And if you want to learn other ideas on how to protect yourself from the many risks out there right now including inflation use the following links.
- Why You Need To Protect Your Portfolio Now
- Why You Must Build An Emergency Fund Now To Protect Your Retirement
- 1 Tip To Protect Your Retirement – Avoid Bonds
- What Should You Do As Home Prices Skyrocket?
Your guide to financial freedom and achieving your retirement goals.
Always in your service,
Publisher Stock Market Daily
P.S. Breaking Poll – Are You Seeing Higher Prices When You Buy Groceries or Pay For Gas? Vote Here