Key Points
- The Federal Reserve tried to slay inflation, but it’s coming back
- Inflation can destroy many investments and make it challenging to find a reasonable return
- Altria and Phillip Morris are two great choices for inflation protection
- Even better, are the two ‘Dividend Legends‘ that can’t stop paying their investors. Read more here.
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Read The Transcript
[00:00:00] Doug McIntyre: They want to talk a little bit about inflation. Uh, the feds slayed the inflation dragon eight, almost 9 percent CPI. Down to, you know, 2. 2, maybe a little bit lower. It almost doesn’t matter right now who gets elected. Both are talking about spending lots and lots of money. There may be some tariffs. I know, uh, Donald Trump Trump, very high tariffs.
[00:00:32] Doug McIntyre: This could be highly inflationary for people who are watching right now. And you’re thinking about, should I be in stock? Should I be in bonds? What do I bid? I would take. Your brain and reset it back to three years ago and start to think about how would you position yourself if you were going to move back into an inflationary environment?
[00:00:53] Doug McIntyre: And I mean, real, real inflation. I mean, going back to that level, because if you start to have tariffs of subsubstance, Much of the stuff that’s coming in from China could be, you know, very high tariffs on it. And suddenly, you know, as people say, it’s like a tax, it’s like a tax on Americans that have these tariffs.
[00:01:15] Doug McIntyre: So, I mean, what do you think? I would, I would position myself for the fact that there could be significant inflation against starting sometime early next year.
[00:01:25] Lee Jackson: Yeah, I think that’s what they’re concerned about in there. They’re already the writers starting to tap the brakes on the fed, you know, Maybe they’re not going to lower rates.
[00:01:34] Lee Jackson: Well, they’ll probably lower rates in november after the election It’s all but priced in I mean 92 on the futures market But the thing that’s interesting and I saw john paulson the other day discussing this, you know, you know, and Paulson’s Republican leaning, but he had an interesting point on tariffs.
[00:01:52] Lee Jackson: He said that they’re going to be necessary. And he said, the major problem is, is that You know, there is tariffs on every one of our products going out of the country, and they’re much higher than our standard basic tariffs on incoming products, much higher in Europe, in Asia and everywhere. And, you know, Paulson’s point was like We need to match those tariffs at the minimum and, you know, literally bring the hammer where we need to.
[00:02:20] Lee Jackson: So, yeah, I think they’re, they’re coming and it should be noted that president Biden, a lot of the tariffs that Donald Trump put on Biden did not remove those tariffs. He kept them in place because he knows they were needed.
[00:02:33] Doug McIntyre: Yeah. Well, once again, uh, I think people who are listening to this, I would look at whether or not you want to position yourself in the first quarter for another wave of inflation.
[00:02:47] Doug McIntyre: Now, listen, it’s like everything else. It’s like, do I want to buy Nvidia? Well, Nvidia could drop on earnings. It may go another 20%, but at least think about it. Like you don’t think about buying Nvidia, think about inflation. And if inflation. Keats back up again. Where do you want to be? Where, where do you, where do you want your portfolio to be?
[00:03:07] Doug McIntyre: So it’s just, it’s, it’s a cautionary comment.
[00:03:10] Lee Jackson: Yeah. And you know, we’ve been around long enough to see the, you know, the kind of market that we’ve been in for the last two years before, and we saw it in 98, 99, and 2000, we saw to some, some extent. five and a six prior to the great mortgage blow up. And, you know, we’ve seen it before and the bottom line, regardless of what you want to do, you may want to take some chips off the table because regardless of who wins, regardless of who wins next week.
[00:03:40] Lee Jackson: There’s going to be extreme volatility, extreme volatility, I believe. And you know, who knows there, there, there could be some geopolitical, you know, domestic geopolitical sort of situations who knows, but it’s, it’s time now to take some money off the table after a 50 percent increase in the last two years, which is stellar and it’s wonderful, especially if you’re younger and fully invested.
[00:04:07] Lee Jackson: But now’s the time to consider a either. Taking some off or be moving to some safer items. Like we recommend dividend paying stocks, you know, like Altria (NYSE: MO) and things that we’ve discussed in the past, where, you know, they’re going to deliver that dividend regardless of the,
[00:04:22] Doug McIntyre: I was looking at Philip Morris today.
[00:04:26] Doug McIntyre: 4 percent heading towards five. I mean, if you looked at the earnings that they just posted stellar stock is up 38 percent this year against the S and P up 23%. I mean, if I had to pick, pick a defensive stock today, Philip Morris (NYSE: PM) would be my pick.
[00:04:42] Lee Jackson: Yeah. Or Altria. Yeah. Or, or British American tobacco, which is combined with the old Reynolds, which made Winston’s and Camels.
[00:04:52] Lee Jackson: They have almost a 9 percent dividend and they, they, they’re a cash flow giant. So yeah, I mean, if you want to be in the market, well then stay with big dividend stocks. So if things go south or if they go flat and go sideways, you’re at least collecting that great dividend.
[00:05:07] Doug McIntyre: Yeah.
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