Karen Firestone: these stocks have a built-in hedge against inflation

on Oct 15, 2021
  • Karen Firestone discusses investment strategy in times of rising inflation.
  • She likes Charles Schwab and Blackstone more than the big banks.
  • The benchmark S&P 500 index is trading near its all-time high.

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The famous “cash is trash” comment from Bridgewater Associates Ray Dalio last year has been the bible for investors amidst the global pandemic. With rising inflation, however, it’s getting more challenging for them to find names with a built-in hedge against it.   

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Firestone’s remarks on CNBC’s “Squawk Box”

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According to Aureus Asset Management’s Karen Firestone, investing in growth stocks continues to be a smart move to hedge against inflation. On CNBC’s “Squawk Box”, she said:

We’re biased towards growth. We like companies with some inflationary hedge. So, the names we like include Netflix, Salesforce, CME Group, Twilio, American Express, Visa, United Healthcare, and American Tower.

She agreed that the benchmark S&P 500 index was trading near its all-time high but said there were still opportunities to make money in sectors that haven’t contributed to the SPX rally and are down more than 10%.  

Firestone doesn’t own shares of the Wall Street banks

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Firestone disclosed in her interview with CNBC that she doesn’t own shares of the Wall Street banks as other players in the financial sector like Charles Schwab and Blackstone offer better means of playing the higher interest rate environment. She added:

I think the traditional big banks are showing strength better than expected, but other opportunities are a better interest rate play; as rates go up, they go up, and we can play that also with Charles Schwab.

The largest U.S. lenders reported quarterly results this week. On Thursday, Morgan Stanley said its net income and revenue jumped more than 25% in the fiscal third quarter.

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