Quantum Wealth Summary
- The Covid pandemic has led to a more unfair world and inflation not seen in decades
- What can investors do to navigate the threats to their wealth and income?
- How can investors actually position themselves to ride this storm and profit?
- Which companies and stocks could be well placed to avoid this inflation robber?
I hate injustice. I hate unfairness.
But the Covid pandemic has exacerbated both.
As with any economic crunch, some groups are more affected than others.
During the Global Financial Crisis, recent homebuyers were hurt. Short-run sharemarket investors were upset. But for those able to hold through that crisis, both saw recovery.
This time is different.
I see these groups dealt — or about to be dealt — an excessive blow:
- Small-business owners in events, tourism, or hospitality
- Recent homebuyers and/or those with large mortgages about to reprice — potentially at twice the cost
- People with long commutes facing much higher fuel costs and all those on regular incomes facing higher daily living costs
- Leveraged property developers facing an uncertain residential property market
- Both landlords and renters facing increased cost pressures due to regulation
Meanwhile, other groups have been handed an incredible opportunity to profit. And cement their position:
Amazon stock has grown around 50% since the pandemic and revenue has increased.
Source: Ordermentum
- Large non-retail suppliers such as Amazon [NASDAQ:AMZN] and The Market (The Warehouse [NZX:WHS])
- Essential consumer staples businesses such as Countdown (Woolworths [ASX:WOW])
- Dominant large banks able to reprice their mortgage books and increase interest margin
- Government regulators, civil servants, and associated services such as lawyers and compliance staff
- Investors with access to cash and liquidity to take advantage of volatility opportunity in the markets
One thing is clear. Covid-19 has had a massive state response. All over the world.
The financial response — following ‘lessons’ from the GFC — has been to shore up money supplies, slash interest rates, and provide mass stimulus.
This has occurred simultaneous to a supply crunch in various key industries such as construction, shipping, and microchip manufacture.
No financial genius is needed to see the inevitable outcome.
When you increase the money supply and provide cheques to millions, while tightening regulation and experiencing supply shocks, you end up facing that old thief: inflation.
Everyone experiences inflation differently.
Most will lose. Some will gain.
Today, I want to take a long, hard look at the possibilities for investors to protect their wealth. And potentially gain…
