Suze Orman is a Lesbian from Chicago who produces sound financial advice. She is a fantastic self-promoter. About inflation, she says buy banks.
"With soaring inflation no longer "transitory," according to the Fed, Americans are preparing for their purchasing power to take another hit.
But whether inflation is coming out of hibernation or we’re heading towards a bear market, Suze Orman, personal finance expert, says you should still lean on stocks for the long haul.
“Over the long-term stocks have produced the best gains after factoring in inflation,” wrote Orman in a blog post this past summer. “Bonds and cash struggle to keep pace with inflation; only stocks have a track record of earning more than inflation.”
Some areas of the stock market perform better than others during periods of high inflation. A bear market offers the chance to snap up more top-shelf stocks at bargain-bin prices. When the next pullback happens (and it will happen), there’s one place investors might want to look to first: banks.
Unlike the vast majority of other industries, banks actually fare well when the Fed tightens up because of their asset-sensitive nature. When interest rates rise, bank assets like bonds and loans tend to climb higher than their liabilities such as deposits.
Rising rates also mean that banks can earn a wider spread between what they pay out in savings account interest and what they earn from Treasuries.
P.S.: I don't really understand her reasoning. I think natural resources rise more.
