How You Should Be Investing During Inflation While The Fed Falters

The Federal Reserve wants it one way, but reality is going to have it another way. 

It’s a long-running trope that those at the upper tier of the country’s political machine are out of touch. We’ve seen time and again that career politicians are out of touch with the people and all too often out of touch with reality itself. 

In that case, the best most people can do is simply work to protect what belongs to them despite what the officials are doing. 

That’s especially important to keep in mind as the economy continues to flounder while the Fed continues its course. 

Just last week, Fed Chairman Jerome Powell stated that the Fed is committed to doing whatever it takes to fight inflation. Essentially, that means they intend on raising interest rates several more times throughout the year. 

Even if signs point to that hurting global equity markets even more than they are now, the Fed seems intent on staying the course. 

To Chairman Powell’s credit, he admitted that they acted too slowly in raising rates. Former Fed Chair Ben Bernanke said the same thing. But this commitment to going full-send on raising rates shows that the economy might be in even more trouble than it is now. 20/20 hindsight isn’t going to get the economy out of this tailspin any more than Chairman Powell’s proposed hikes are. 

The goal of the Fed is to soften the landing, but it looks more like the course correction they want is wishful thinking at this point. Instead, it’s up to anyone with money in the markets to brace for impact and prepare for the pain ahead. 

It’s anyone’s guess what that could look like. We’ve already seen plunges in tech, retail, crypto, and just about every other sector. Those trends are likely to continue. 

This could play out any number of ways. We may see a sharp, sudden decline followed by an equally sharp and sudden recovery. The decline could continue steadily, as it is now, and see an equally gradual recovery. There’s also the chance of a prolonged recovery, much like what came after the financial crisis of 2008. 

Recovery could also be uneven where some sectors recover quickly while others recover more slowly. We saw that after the start of the pandemic, where industries like tech recovered fairly quickly while others, like hospitality, still struggle today. 

It’s too early to say which type of economic environment we’ll see in the next few quarters and years. Regardless of what form the decline and recovery take, investors do have options for how to protect their wealth. 

Commodities and critical resources are one way to do that. Even with stocks taking a hit and inflation ramping up, demand isn’t slowing in some areas. There’s more demand than ever for green technology to fight climate change. War in Europe means more investment in defense tech. 

On the consumer side, electric vehicle demand is only going to go up over the next decade. The spike in gas prices is just the tip of the iceberg there. 

All of these factors, and others, mean that the world is going to need more supply of elements like copper, aluminum, uranium, lithium, and others. 

So even with markets being what they are now, investing in the commodities sector is about as safe a bet as one can make right now. 

This is a cycle we’ve seen in the past. Whenever it happened, investors who played it right were able to multiply their money many, many times over. 

The recent pullback is presenting you with that exact opportunity right now. 

There are certain commodity plays you can make to help come out ahead of this turbulent market. But you need to act now for maximum gains.

Ryan Stancil

Ryan Stancil
Editor, Daily Profit Cycle