How to Beat Inflation with Investments in 2021?



WikiFX Strategy (5 Jan.) - Bloomberg data shows that the break-even inflation rate - a measure that draws on inflation-linked expectations - has hit a record high. Since the US election has ended and the relief bill has been passed, inflation trends could be crucial to market performance in 2021 amid the vaccine hopes and the Fed's loosening policy.
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Now that we've expected future inflation, how to beat it with investments accordingly?
Commodity investing could be one of the best options. Copper, iron ore and soybeans have risen to their highest levels in more than six years, says BlackRock analyst Evy Hambro. Recovering global economic growth and the possibility of higher inflation should be supportive for prices.
Investing with ETFs in a broad basket of commodities is also a good choice, which includes SPDR Gold Trust (the largest gold ETF in the world), USO (an oil ETF), etc.
Potential investments also include commodity currencies that are strongly linked with commodity prices, such as AUD, NZD and CAD. These currencies will embrace a rebound once seeing the economic recovery and the inflation rise.
Another method fighting against inflation is purchasing cyclical stocks (oil, natural gas, coal, steel, non-ferrous metals, etc.)

The US 10-year break-even inflation rates
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