Fears of rising inflation rates have investors seeking out inflation-proof stocks for 2021 to avoid suffering losses.
So where should investors put their money when inflation is heading higher? There are quite a few options to invest in, which include options outside of stocks. However, let’s talk about the market first.
When it comes to inflation-proof stocks, investors are going to want to look for those that can pass on costs to customers. That means investors will want to consider stocks in the consumer staples sector.
Here are some stocks in the consumer staples sector that investors might want to look into during 2021.
- Costco Wholesale (NASDAQ:COST)
- Procter & Gamble (NYSE:PG)
- PepsiCo (NASDAQ:PEP)
- Coca-Cola (NYSE:KO)
- Altria Group (NYSE:MO)
- Nestle (OTCMKTS:NSRGY)
- Energizer Holdings (NYSE:ENR)
- Estée Lauder (NYSE:EL)
- Reynolds Consumer Products (NASDAQ:REYN)
- Hostess Brands (NASDAQ:TWNK)
What investors will likely want to avoid are stocks that focus on generating income through dividends. These stocks are prone to decrease during high inflation as dividends can keep up with rising rates.
Since we’re talking about investment advice and inflation-proof stocks for 2021, there’s no better voice to hear out than Berkshire Hathaway’s (NYSE:BRK.A,BRK.B) Warren Buffett. Here’s a quote from his as collected by CNBC.
“High rates of inflation create a tax on capital that makes much corporate investment unwise – at least if measured by the criterion of a positive real investment return to owners.”
Investors looking for options outside of stocks have several choices to choose from. That includes commodities, such as silver, gold, or even copper. Another option would be buying bonds. Finally, there’s no denying that cryptocurrencies are an attractive opportunity at this time.