Business & Investment

Two Canadian stocks to buy as inflation continues to rise

There is no doubt that the market is recovering steadily less than a year and a half after the pandemic began. In Canada, the economy is on track to resume, Canadian equities are recovering, and the economy looks great, except for fears of inflation.

It is commendable that everyone has survived the pandemic. Of course, health care and frontline workers deserve a lot of gratitude.

The government has done a good job of procuring and distributing vaccines, especially after a late start. And most importantly, Canadians have played an important role in being actively vaccinated.

But now that the pandemic seems to be behind us, the economy and Canadian equities are facing another important challenge. inflation..

How is inflation affecting the economy?

When the pandemic first occurred, it was important for the government to support the economy. Otherwise it could crash.

As a result, governments around the world, especially North America, have poured large amounts of money into their economies. Central banks have also contributed, lowering interest rates and making borrowing very cheap.

And while it was important to bring the economy to the forefront last year, it is now beginning to put pressure on the economy. As a result of all this stimulus, too much money has flowed and prices are now beginning to rise.

May prices averaged more than 3.5% year-on-year, according to the latest CPI report, an indicator of inflation.

Even more serious in the United States, the core CPI rose 4.5% year-on-year. Inflation of 4.5% is very high, more than double the long-term target of the North American central bank, indicating that prices are rising too fast.

Of course, there is no guarantee that inflation will continue to rise. Nothing is guaranteed when it comes to economics. But without major changes, it should come as no surprise that inflation does not continue to grow.

Inflation can also have a devastating impact on savings and investment, so if you’re trying to protect your portfolio and take advantage of opportunities, here are two stocks that could be positively impacted: I will.

Canada’s top energy stocks to buy if you’re worried about inflation

To find Canadian stocks that can withstand rapidly rising inflation, you need to find a company that can easily pass on increased costs to consumers. This usually means a commodity business.So one of the top stocks to consider today is Freehold royalties (TSX: FRU)..

Free hold is high quality Dividend stock It earns royalties from all the energy produced on the land. As the economy recovers and more oil is produced, the company can expect a significant increase in revenue. This is what we have witnessed in the last few months.

However, higher prices can also play an important role in the amount of money these companies produce and the amount of royalties paid to freeholds.

If price levels continue to rise, some energy stocks are worth investing in. Freehold is just one of the lowest risk businesses in the industry. So if you’re worried about inflation, it’s one of Canada’s most popular stocks.

Top of super cheap gold stock trading

Another high quality company to consider today Kirkland Lake Gold (TSX: KL)(NYSE: KL)..

If you’re worried about inflation, gold stocks can also be a big investment. Needless to say, the price of gold has recently been put up for sale and the inventory of these gold is very low.

Gold prices are usually often asked when inflation rises. Inflation is rising due to high costs such as fuel, making it more expensive for companies to produce gold, but top companies can still find ways to increase their margins.

Kirkland Lake is particularly attractive because it is one of the largest gold producers available for purchase. With operations in Canada and Australia, the company poses few significant political risks in the gold sector.

And with inventory down more than 33% from its 52-week high, it now looks like the best time to buy. I don’t think gold stocks will be so long and cheap.


This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Services or Advisors. We are Motley! Asking investment treatises, even our own treatises, can help you think critically about your investment and make decisions to be smarter, happier, and richer. As a result, we may publish articles that may not match recommendations, rankings, or other content. ..

A stupid contributor, Daniel da Costa, owns a stake in FREEHOLD ROYALTIES LTD. Motley Fool recommends FREEHOLD ROYALTIES LTD.

Two Canadian stocks to buy as inflation continues to rise

https://www.fool.ca/2021/07/22/2-canadian-stocks-to-buy-as-inflation-continues-to-rise/ Two Canadian stocks to buy as inflation continues to rise

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