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Which Stocks & ETFs Do Best When Inflation Spikes?

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·2 min read
In this article:
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  • (1:30) - What Stocks Tend To Perform Well In High Inflation Markets?

  • (5:00) - The 70’s vs Now: Learning From Past Inflation Periods

  • (8:30) - Should You Be Using Defined Income ETFs?

  • (11:25) - What Is A Covered Call Strategy?

  • (16:15) - Deploying ESG investing In Your Portfolio

  • (19:30) - Stock Splits and Cryptocurrency: Should You Be Buying?

  • (24:40) - What Is A Barbell Strategy and Will It Work For You?

  • Podcast@Zacks.com

In this episode of ETF Spotlight, I speak with Dr. Derek Horstmeyer, Professor of Finance at George Mason University, and a regular contributor to the Wall Street Journal. His research focus areas include ETF & mutual fund performance.

Inflation, now running at its highest level in four decades, is the biggest concern for investors this year. The Federal Reserve hiked its benchmark interest rate by 75 basis points yesterday, the biggest increase since 1994.

It remains to be seen whether the central bank would be able to engineer a soft landing, by tightening monetary policy just enough to calm inflation while avoiding a recession. Energy and materials companies delivered best returns during past inflationary surges while healthcare and consumer staples performed the worst.

The market uncertainty this year has sent many investors to defined outcome ETFs that seek to match the returns of the broad stock indexes up to a stated upside cap with built-in downside buffer levels. Should investors buy buffer ETFs during uncertain markets?

The Global X NASDAQ 100 Covered Call ETF QYLD has gathered over $2.3 billion this year. What is a covered call strategy and what can these ETFs do for an investor’s portfolio?

There’s been a lot of investor skepticism about ESG particularly after EV maker Tesla TSLA

was kicked out of the S&P ESG index. Greenwashing remains one of the biggest concerns for regulators and investors. Further, ESG funds are exposed to certain risks that many investors may not be aware of.

We have seen a resurgence of stock splits lately by high-profile companies like Google parent Alphabet GOOGL, Amazon AMZN and Tesla. While splits do not change the fundamental value of a company, research shows companies have outperformed their benchmarks in the subsequent months.

We also discuss barbell strategies, cryptocurrencies and Wordle.

Tune in to the podcast to learn more.

Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.


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