How does inflation affect your portfolio?

Firstly happy Thanksgiving to our U.S. friends!!

It's an uncomfortable time in the market for many right now. Interest hikes are hurting yet we still see bullish activity... some perfectly valid, some runs leave us wondering why or how a particular stock is doing so well,and scepticism kicks in. But rate hikes or not, the market always provides a discount if you're looking.

I hold some stock very dependant on loans and interest rates.  It may be a slow hike but sometimes the consequences hit fast. There is always a *point* to which they reach running on debt before they're cut off ✂️ Or thrive 🎉

I bought in firstly over 4.1. I thought that WAS the dip!! so VERY wrong. Thank You interest rates! 😠 it went down further but I bought the dips, into the 1's. They really were on the verge but I invested in May or early June due to their position in the lithium market. After rate hikes their debt cost was sooo high. Luckily this month U.S dept energy clearly saw their good position as more valuable than the debt and chipped in, sending share price back up quickly,with a little pullback,now sitting around 2.38 I think.

No big news bailout from a foreign govt, just a quiet, successful capital raising. Sure share price isn't sky-rocketing back up like novonix but it IS rising. And the slower it goes the longer I have to buy more under 0.42!!!

Aus.Super is one of our biggest Super funds, and it is a BIG holder of Jervois so I don't see them, the NSW or other state govt OR Fed.govt letting them sink. Too many Aussies are invested in them with their superannuation and don't even know it. Many never ever even heard of JRV or other stocks in their funds. If our government is chipping in they are solid. Our government is like Scrooge so I take that seriously 😆

  Other companies running on debt have not been so lucky since rates are climbing.

If just investing now, look for profitable companies and avoid those stocks that have high debt or are looking for loans in this climate. Try for those that are better established and debt free (or as close as possible 😉) or even those that PROVIDE the loans!! Loans and bailouts, equity raising that dilutes share price with added shares or added debt etc..these things are more volatile when interest rates rise. If you listen to company news you can get in on runs early but pay attention to their debt to equity ratios! Put your money to work, to grow. Not to some companies interest rate bill on their massive debt unless there is an end point, a purpose. Those barely running now whilst paying rates will suffer when rates climb higher📈 needing more loans adding way more debt with higher interest. 📉

**using one credit card to pay another still leaves you with a bill, just extended the due date while adding more interest 🤷🏼‍♀️ same as big company loans. without a profitable way to pay that final debt they need to borrow more, again and again.

I guess that's a lesson for everyones November journal right?? make sure there's and end game for companies that are in debt and borrowing in this climate.. Everyone needs backing even the big boys so find out where they get their cash! is it profit? is it from shareholders/market price? capital raising from shareholders & funds? or is it loans? if loans find out how much $ and what it's for. Operating costs running on debt with little profit (that goes back to the lenders not shareholders) isn't a good look loans aren't always bad though, ask Novonix! If that cost is going INTO something that will profit longer term, those offering loans can reduce their own rate knowing they WANT to be the one giving the loan.... selling the loan cheaper to secure it. knowing the company will be in a good position to pay that loan early and hopefully secure what is essentially a line of credit. That is what you want to see if your company is borrowing. Not them scrambling to find a loan..... we want many lenders scrambling to offer their services. In this lithium boom here, many small caps are in need of a hand to open their mines.... some are buying each other out, big fish swallowing small fish making big fish bigger... BHP, Rio tinto and the like are sharks eating bigger fish. Actively looking to eat (sorry, to SAVE) small caps that are drowning lol. Dog eat dog world in Aussie mining and resources! lots of borrowing and lending on hopes they can start or continue operating.. otherwise time runs out and their lease could be gone with your money!

sometimes loans are necessary..... sometimes a loan is all it takes to get up with wind in your sails.....

but sometimes it doesn't help and they're just left with more debt.

Make sure you know where their cash comes from! Interest rates can really, REALLY affect your portfolio regardless of the industries you're in.