Aussies are obsessed with googling 'inflation', which equity sectors can combat it?
In March, Google searches for the word "inflation" had their best month since May 2008, when Australia was in the midst of its last major inflation outbreak.
Google searches for 'inflation' in Australia
Google searches for 'inflation' in Australia
Wages have not kept pace with inflation. Workers' pay packets have increased 6.6%, while the price of what households buy has climbed 7.0%, meaning purchasing power has gone backwards.
Supermarket staples have become more expensive. Beef prices have climbed 29 per cent, while the prices of lamb, vegetables, cereal, juice, pork, and cheese have also increased faster than wages over this period.
Price changes over the course of the Morrison government
Change in the wage price index and the consumer price index between September quarter 2018 and December quarter 2021
Supermarket staples have become more expensive. Beef prices have climbed 29 per cent, while the prices of lamb, vegetables, cereal, juice, pork, and cheese have also increased faster than wages over this period.
Price changes over the course of the Morrison government
Change in the wage price index and the consumer price index between September quarter 2018 and December quarter 2021
Australian equity markets year-to-date have been characterised by elevated volatility, caused by a rapid acceleration of inflation and growing expectations for monetary policy tightening.
What companies offer protection against inflation and rising cost of living?
For the right type of company, higher inflation can lead to increased revenues, but it is vital that they are able to pass on the higher costs associated with inflation to protect or grow their margins, and ultimately grow their dividends.
These are the 4 sectors that tend to be associated with positive inflation trends:
What companies offer protection against inflation and rising cost of living?
For the right type of company, higher inflation can lead to increased revenues, but it is vital that they are able to pass on the higher costs associated with inflation to protect or grow their margins, and ultimately grow their dividends.
These are the 4 sectors that tend to be associated with positive inflation trends:
1. Financials companies, such as banks and insurers, can pass through costs via rate increases.
2. Real Assets such as toll roads, shopping centres and utilities will typically have inflation pass-through mechanisms.
3. Industrials benefit from dominant market positioning and gross margin protection.
4. Resources companies will benefit from increasing commodity prices.
Which stocks/ sectors would you consider adding to your portfolio? Vote and share your investment ideas with me in the comment section!
2. Real Assets such as toll roads, shopping centres and utilities will typically have inflation pass-through mechanisms.
3. Industrials benefit from dominant market positioning and gross margin protection.
4. Resources companies will benefit from increasing commodity prices.
Which stocks/ sectors would you consider adding to your portfolio? Vote and share your investment ideas with me in the comment section!
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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