The “S” Word – Investing During Stagflation

The financial press is a-buzz with talk about “stagflation.” But you won’t know how to handle the hype unless you know what stagflation really means for you and your portfolio.

Investopedia.com calls stagflation “a condition of slow economic growth and relatively high unemployment – a time of stagnation – accompanied by a rise in prices, or inflation.”

Right now, we are looking at a possible scenario in which the economy slows dramatically and, as a double whammy, inflation runs higher than normal. The average fixed-income investment won’t keep up with the higher inflation rate, and most stocks will drop in value because of the slower economy.

So how do you invest during a period of stagflation? Very carefully. 

During periods of high inflation, natural-resource investing is one of the best ways to outperform the market. Gold, uranium, silver, and other natural resources tend to move higher. 

Resource investing is not my area of expertise, but my colleague, Dr. Rusty McDougal, is an accomplished natural-resource investor. He writes the Resource Windfall Speculator newsletter, which can help you through a difficult time like this in the market.

[Ed. Note: Rick Pendergraft is a professional trader and market analyst. In Rick’s new investment service, he reveals how you can make hundreds – even thousands – of dollars just by playing a simple game of “guess the pattern.” Learn more here.]