The Upside to Inflation

Inflation Investing
Can you make money from inflation? Sure you can. Just figure out where the inflation is coming from.

The culprits? Oil and commodities – including those “soft” agricultural ones, like corn, wheat, and coffee (all at all-time highs). Looking at the portfolios of my trade services, I can tell you the kind of companies that are advancing from these rising prices.

  • Mining equipment. Miners have the money and incentive to dig for more stuff, as coal, iron ore, nickel, gold, and silver are all going up.
  • Agriculture equipment and fertilizer. Same scenario, with farmers replacing miners and coal and metals replaced by corn, wheat, rice, and soy beans.
  • Oilfield equipment. Same scenario, with oil companies replacing farmers and crude replacing agricultural products.

When the market recently dipped by half a percent, shares of my recommended mining equipment company went up 9.5 percent. My oil rig maker rose 7.1 percent. My fertilizer company rose “only” 5.5 percent.

Not every week is going to be this good. But the trend is unmistakable. Shares of these companies (and those like them) are going strong, and should continue to do so. Inflation is taking a bite out of your earning power, yes? Now you know how to bite back.

[Ed. Note: ETR’s Investment Director, Andrew Gordon, is the editor of INCOME, a monthly financial advisory service that uncovers income-generating stocks that promise safety (first and foremost), along with much-higher-than-average profit potential.]