How to beat inflation … with bonds?!
Sep 30, 2021Good morning!
The markets strike me as a lot like an old country dance tune right now … rates down, stocks up. I bet if we played ‘em backwards the truck would run, the fields would plough themselves and the dog would come home, too!
All joshing aside, I actually love country music as much as I love the markets because there’s plenty of music and money to be made.
Here’s my playbook.
1 – How to beat inflation …. with bonds
Wall Street would have you convinced that bonds are the enemy when it comes to rising rates. That’s not necessarily true if you understand how to make the right choices.
Here’s one investment strategist using a page straight outta my playbook – and I love what she has to say because it matches up so precisely!
2 – Government shut down relief rally or something else?
I’m in the something else camp. We knew coming into the month that September would be rocky, and the markets have certainly met their billing. Today’s action in the early going strikes me as nothing more than a quarter-ending volatility induced rally. Traders and investors are starting to “window” dress as they head into Q4 when bonuses hit and clients expect answers.
Don’t get sucked into questionable stocks.
Quality and liquidity matter and should be where you concentrate your money and your efforts. Apple over Uber, for example. Costco over Bed Bath & Beyond (which is getting clobbered in pre-market trading after reporting lacklustre results).
3 – Long overdue but not enough to make me want to buy the stock
Lowe’s is going to roll out a first-responder discount program nationwide from October 22-24. The company has offered veterans discounts for years on an ongoing basis. The chain can and should do better.
Why isn’t this permanent, Lowe’s?
4 – Avoid these stocks at all cost
Dollar Tree is going to be selling a lot more stuff priced for more than a buck citing higher production and transportation costs. Next up … buy now, pay later models at which point the consumer is totally hosed. Not for nothing, but the Federal Reserve will probably still insist inflation is transitory.
Calls into question so-called bargain-oriented retailer stocks like Ross (ROST) or Kohl’s (KSS) which recently got a “double downgrade.”
The worst mistake an investor could make right now is to own the “rest” when buying the “best” is what’ll take you through this mess!
5 – More doom than boom in China these days
Chinese business activity is slowing and even the normally massaged consumption numbers put out by Beijing’s ministry of propaganda don’t pass the sniff test. The purchasing managers index, for example, declined from 50.1 in August to 49.6 in September while there are widespread power shortages being reported. Consumer confidence is stable according to the powers that be, but manufacturing shrunk.
Something doesn’t add up.
I continue to steer clear of Chinese stocks and will for the foreseeable future.
Bottom Line
Can a retail investor compete with the pros?
Absolutely!
The trick is picking battles they have no interest in fighting and using tactics they can’t counter. If you know what to do, that’s awesome! If not and you’d like some help, I’m here.
As a matter of fact, I will be sharing three brand new recommendations drawn from my latest research this Friday in the next issue of One Bar Ahead™, including a $3 stock that could lead the next internet gold rush.
But again, no pressure.
I simply want to be the guy who helps you get where you want to go.
You got this – I promise!
Keith :-)
