‘Stop Panicking’ About Inflation: Here’s How To Benefit From Soaring Costs

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Cramer: ‘Stop Panicking’ About Inflation – Here’s How To Profit From Soaring Costs

The threat of runaway inflation scares many investors, but for once Jim Cramer isn’t getting too heated.

The Crazy money The host says there are still plenty of attractive places to put your money, highlighting four areas in particular that could benefit from the price hike.

“We have a lot of companies benefiting from it – and a lot that are benefiting, you could say, dramatically – and others that are fundamentally immune,” Cramer said on his show last week. “Lots of winners out there if you stop panicking and start looking at the opportunities.”

Here are the four safe havens recommended by Cramer and why you might want to channel money this way, even if it’s just your pennies.

Energy

Oil and gas platform with gas combustion, electric power.

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Inflation and commodity booms often go hand in hand, with energy typically leading the charge.

In fact, the price of crude oil has already risen by over 70% since the start of the year, while natural gas prices have more than doubled.

Among the large multinational power producers, “I like Chevron the most,” Cramer says.

“[The company] earns almost 5% [and is] committed to spending $ 10 billion on new, more energy-efficient technologies.

Cramer also likes domestic producers who seem to be returning more and more capital to shareholders in the form of dividends – naming Devon Energy and Pioneer Natural Resources as a couple.

Finance

Wells Fargo Location

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Banks tend to do well with rising interest rates. And in the face of rising inflation, the Fed is expected to raise rates as early as next year.

Cramer points out how well Bank of America, Goldman Sachs and Morgan Stanley have performed, but he also likes Wells Fargo for being a “wild turnaround of this whole stock market.”

After rallying 70% year-to-date, Wells Fargo shares are now trading at about the same level as in January 2020. The other three stocks, however, are trading well above their levels. before the pandemic.

“Wells Fargo can have a ton of benefits if it finally gets its house in order,” Cramer said. “And I tell you, he’s tidying up his house.”

Technology

Salesforce logo

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Cramer argues that if companies are struggling to find employees during the current labor shortage, they will need to maximize their use of technology to improve productivity.

“So they have to hire Salesforce.com, Adobe, Workday, Amazon Web Services, Microsoft’s Azure or ServiceNow… or Snowflake,” he says.

Tech has been one of the hottest sectors in the market for quite some time, and many of the tickers mentioned here have already risen.

Microsoft shares are up 47% in the past year, Workday by 33%, while Snowflake and ServiceNow are both up about 36%.

This means that these actions have become expensive; ServiceNow is trading at over $ 680 per share, for example.

Fortunately, you don’t have to buy full shares. Nowadays, you can use a popular investing app to buy fractional shares with as much money as you are willing to spend.

Great pharma

Johnson and Johnson logo with medical worker

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Not all drug companies do well in an inflationary environment, but you might want to add Eli Lilly and Johnson & Johnson to your watchlist.

“I’m more and more confident about their Alzheimer’s disease medication,” Cramer said of Eli Lilly.

As for Johnson & Johnson, Cramer recalls how the stock “is initially hit” when its last earnings report comes out, “then it comes back unchanged, then it gets hit again, then boom, it takes off.”

In the third quarter, Johnson & Johnson sales increased 11% year-on-year to $ 23.3 billion. Adjusted earnings per share rose 18.2% to $ 2.60.

A fifth option

A woman takes a photo of Banksy's artwork

Davide Zanin Photography / Shutterstock

While Cramer has focused his advice on the stock market, you don’t have to limit yourself to stocks to hedge against inflation.

In fact, if you want something that has little correlation to the ups and downs of the stock market, you might want to consider an overlooked asset: the fine art.

Contemporary works of art have offered an annual return of 14% over the past 25 years, easily surpassing the 9.5% return of the S&P 500.

Investing in the fine art by Banksy and Andy Warhol was previously only an option for the ultra-rich, like Cramer.

But with a new investment platform, you can also invest in iconic works of art, just like Jeff Bezos and Peggy Guggenheim do.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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