Five Investments to Consider for Navigating Inflation and the Fed’s Rate Hikes

Paul Dykewicz

Five investments to consider buying for protection against inflation and Fed rate hikes were cited as key concerns by prominent speakers at the annual Global Financial Summit at the FreedomFest conference held July 13-16 in Las Vegas.

The five investments to consider buying to guard against inflation and Fed rate increases feature a fund tied to the U.S. dollar, an infrastructure stock, a pension chairman’s pick and two speculative mining stocks. Those five investments to consider buying offer ways to seek profits while also trying to limit potential downside as Russia continues its unrelenting invasion of neighboring Ukraine and supply chain problems persist, partly due to China’s lockdowns aimed at keeping a zero-tolerance policy of COVID-19 outbreaks.

Russia’s aggression has been disrupting the supply of food, grain and fertilizer, while China’s strict COVID policy could be described as “crazy” for preventing people from shopping for food, picking up prescriptions or going outdoors for fresh air and exercise, said media mogul Steve Forbes. In America, the leaders enacting such policies could be voted out of office, but in China, protestors can be arrested and put in the “slammer,” Forbes told FreedomFest attendees. 

Unfortunately, the Biden administration is waging war against commerce and people producing products and services, Forbes said. It is especially occurring in the energy industry to suppress supply, causing prices to rise, he added.

U.S. Dollar Fund is Among Five Investments to Consider for Navigating Inflation

Mark Skousen, who also leads the Forecasts & Strategies investment newsletter and the Five Star TraderHome Run Trader, TNT Trader services, recommends owning the Invesco DB U.S. Dollar Index Bullish Fund (NYSE: UUP) in the Fast Money Alert, co-led by seasoned stock picker Jim Woods. The recommendation has proven to be profitable since they recommended it earlier this year as a hedge against inflation.

Mark Skousen, head of Forecasts & Strategies, meets with Paul Dykewicz.

In contrast, traditional inflation hedges such as gold, silver and foreign currencies such as Swiss francs have not appreciated amid rising prices so far, Skousen said. To protect a profit in UUP, Skousen and Woods raised their stop price on the fund.

“The Fed’s tighter monetary policy should keep the dollar strong,” according to Fast Money Alert

Invesco DB U.S. Dollar Index Bullish Fund will go up as inflation slowly goes back down, Skousen counseled. UUP is designed as a safe investment until the next strong growth period in technology stocks, he added.

Chart courtesy of www.stockcharts.com

Brookfield Infrastructure Joins Five Investments to Consider for Navigating Inflation

Skousen, who funds and helps to organize FreedomFest, told me his favorite infrastructure investment is Brookfield Infrastructure Corp. (NYSE: BIPC), particularly with its 3.4% forward dividend yield. The stock completed a three-to-two stock split in June that helped to prevent it from falling much, despite the overall market pulling back.

Another plus is that the company boosted its dividend payment, Skousen continued. A rising dividend policy is a good sign that a company is on strong financial footing, he added.

“I’m bullish on infrastructure investments into the next year or two as the United States and the world need constant upgrading,” Skousen advised his Forecasts & Strategies newsletter subscribers. Based in New York and Toronto, Brookfield invests in utilities, pipelines, toll roads, railroads, ports and data sectors in North and South America, Europe and Asia.

Chart courtesy of www.stockcharts.com

Pension Chairman Chooses Fund as One of the Five Investments to Fend off Inflation

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Bob Carlson, a pension fund chairman who also leads the Retirement Watch investment newsletter, is recommending DWS RREEF Real Assets (AAASX). The investment uses a basket of four different inflation hedges and has six share classes.

Carlson counseled for investors to consult with their brokers or the fund for guidance about the best share class for each person. The mutual fund is allocated among inflation-sensitive assets, including infrastructure stocks, commodities, gold, real estate stocks and Treasury Inflation-Protected Securities (TIPS). It owns both stocks and futures contracts.

Chart courtesy of www.stockcharts.com

Five Investments to Fend Off Inflation Feature Unique Fund

The fund’s managers change the allocations to the different sectors based on economic outlook and inflation. They have shown a knack for profitably adjusting the portfolio, Carlson commented.

In addition, analysts specializing in each of the sectors select the individual securities to be purchased after the top managers decide on allocations. This investment offers diversification and a chance to benefit from a full basket of inflation hedges, he added.

Bob Carlson, who leads Retirement Watch, meets with Paul Dykewicz.

Two Junior Mining Stocks Round out Five Investments to Fend Off Inflation

Jeff Phillips, a FreedomFest speaker who is the president of Global Market Development in Hidden Lake Ranch, California, suggested two high-risk, high-reward speculations. They potentially could produce 10-fold returns but also carry possible downside risk of about half an investor’s capital.

“I believe commodity prices will head higher in the future as it is getting harder to find and more costly to extract,” Phillips opined.

Investors who want exposure to gold can invest in companies such as Newmont Corp. (NYSE: NEM), of Greenwood Village, Colorado, and Toronto’s Barrick Gold Corp. (NYSE: GOLD), Phillips said. For those who want to invest in uranium, Canada’s Cameco (NYSE: CCJ), of Saskatoon, Saskatchewan, is a “go-to name,” he added.

“These are somewhat safer, but in a bull market for specific commodities will not do as well as speculations in the space,” Phillips said. 

Five Investments to Consider Buying to Fend Off Inflation Tap Gold and Uranium

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“In general, I like land, metals commodities: copper, uranium, lithium, zinc, nickel, cobalt and physical gold in an environment where the dollar is being continuously being printed and given away,” Phillips said. “I personally speculate in the higher risk junior developers and explorers.”

Phillips said his goal is to achieve a 5- to 10-fold return with half his picks, knowing that the other ones might not work out. He confirmed typically owning a dozen or so of these junior mining companies.

One speculation that Phillips mentioned to me is Toronto’s Revival Gold Inc. (TSX.V -RVG OTCQX-RVGLF). The stock is a growth-focused gold exploration and development company that is advancing the Beartrack-Arnett Gold Project in Idaho.

Beartrack-Arnett is the largest, past-producing gold mine in Idaho. Engineering work has been initiated on a Preliminary Feasibility Study (PFS) for the potential restart of heap leach operations, Phillips mentioned. 

The mineralized trend at Beartrack extends for more than five kilometers. Mineralization at Arnett is open in all directions, Phillips added. Drilling is ongoing with results expected in September. The junior mining company’s current market cap values it at approximately $8 per ounce, compared to better-established peers valued at $25 per ounce. Revival Gold has approximately 86.9 million shares outstanding and a cash balance of C$9.1 million, or $7.07 million, as of March 31, 2022.

Skyharbour Resources Gains Final Spot Among Five Investments to Fend off Inflation

Skyharbour Resources (TSX.V: SYH; OTCQB: SYHBF) is a high-grade uranium exploration company in Athabasca Basin, Saskatchewan. The company is positioned to benefit from a rise in the price of uranium, Phillips said.

In addition, the company is led by “strong” management and a geological team that has a successful track record, Phillips continued. It also is based in a top mining jurisdiction with proven geology, featuring a large land package that consists of 15 projects covering more than 1.1 million acres.

Skyharbour Resources further has an attractive capital structure, is well-financed and has Toronto-based Denison Mines (NYSE: DNN) as a strategic shareholder. London-based Rio Tinto (NYSE: RIO), the world’s second-largest mining company, recently partnered with Skyharbour Resources to acquire the Russell Lake Uranium Project.

Chart courtesy of www.stockcharts.com

Supply Chain Challenges and Rising COVID-19 Cases Put Supply Chains at Risk

China reported 1,012 new COVID-19 cases on Tuesday, July 19, up from 776 the previous day, according to its National Health Commission. The results marked the first time the number of COVID-19 cases in China had breached 1,000 since May 20.

Any time the case numbers jump, China’s leaders may impose sudden lockdowns to adhere to its “zero-tolerance” policy. Several large Chinese cities, including Shanghai, are rolling out new mass testing or extending lockdowns on millions of residents to counter new COVID-19 infections, but not without drawing criticism on the internet.

China reported an average of around 390 local daily infections in the seven days ending on Sunday, July 17, higher than roughly 340 infections seven days earlier,

U.S. COVID Deaths Near 1.025 Million

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U.S. COVID-19 deaths climbed by more than 3,000 in the past week to total 1,024,900, as of July 20, according to Johns Hopkins University. Cases in the United States jumped by nearly 900,000 to 89,836,091. America still holds the dreaded distinction as the country with the largest number of COVID-19 deaths and cases.

COVID-19 deaths jumped by 19,000 in the past week worldwide to reach 6,374,412 as of July 20, according to Johns Hopkins. Global COVID-19 cases rose more than 7.5 million during the last week to total 565,215,839 by July 20.

Roughly 78.5% of the U.S. population, or 260,728,030, have obtained at least one dose of a COVID-19 vaccine, as of July 13, the CDC reported. Fully vaccinated people total 222,682,315, or 67.1%, of America’s population, according to the CDC. The United States also has given at least one COVID-19 booster vaccine to 107 million people.

The five investments to consider buying for navigating inflation include conservative and speculative recommendations. With the highest inflation in 42 years, a potential Fed rate hike of 0.75% this month and other rate increases likely to follow, the outlook for the five investments to buy are promising, despite supply chain woes and Russia’s unrelenting invasion of Ukraine.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street JournalInvestor’s Business DailyUSA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many othersCall 202-677-4457 for multiple-book pricing.

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