Despite the Federal Reserve’s aggressive interest rate hikes in recent months, inflation in the U.S. remains high. This pushed many investors into panic mode and caused a widespread stock selloff. But according to businessman and Shark Tank star Kevin O’Leary, this isn’t the right approach.
During a recent interview with CNBC, O’Leary argued that “equities are the place to be” as the fixed incomes have it a lot worse as the rising rates hurt fixed incomes a lot more. However, in order to find success, you need to invest in the right stocks.
O’Leary recommends investing in companies that are able to hike the prices of their products with ease while avoiding alienating their customers. This includes consumer cyclicals and healthcare stocks.
“Where you want to be in equities, particularly when rates start taking up, is in companies that have pricing power,” he shared.
O’Leary is also bullish on energy stocks. Although oil prices are decreasing recently, the energy sector proved to be a good place to turn in times of challenging economy. The energy stocks have been up across the board in recent months, and there are no indicators that will change anytime soon.
Finally, the Canadian entrepreneur concluded that owning ETF is also a good strategy for times of high inflation since its dominated by companies that are providing services and manufacturing products people need at all times.