The Best Stocks to Buy to Fight Inflation

As investors, we are concerned about inflation because it causes higher input costs for companies.

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In turn, greater expenses put downward pressure on margins making companies less profitable.

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As a result, less earnings growth or, even worse, lower earnings tends to impact stock prices negatively.

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What is Inflation?

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Most research suggests that high inflation causes low real returns for stocks. Real returns are nominal returns minus inflation.

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Value Stocks Usually Perform Better

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Coca-Cola

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The Best Stocks to Buy to Fight Inflation

As investors, we are concerned about inflation because it causes higher input costs for companies.

In turn, greater expenses put downward pressure on margins making companies less profitable.

As a result, less earnings growth or, even worse, lower earnings tends to impact stock prices negatively.

What is Inflation?

It is the increase in the prices of goods and services, reducing the buying power of the US dollar or any other currency.

Most research suggests that high inflation causes low real returns for stocks. Real returns are nominal returns minus inflation.

Inflation Lowers Stock Market Returns

Value Stocks Usually Perform Better

Riskier usually means growth stocks in the stock market, while value stocks are on the other end of the risk spectrum.

Coca-Cola

The Best Stocks to Buy to Fight Inflation

Coca-Cola has shown its resilience. Sales grew 18% in the first quarter and 12% in the second quarter on higher volumes and prices.

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