The U.S. Consumer Price Index increased 0.4 percent in August and 0.5 percent in July. If the trend continues, it would produce an annualized inflation rate of 5.4 percent. Some retirees and pre-retirees fear inflation may rise even higher, and this could have huge impact on their standards of living, especially with today's ultra-low interest rates.
With gold near a record high and Treasury Inflation-Protected Securities not very attractive, what's the best anti-inflation strategy? It may include stocks of the world's largest and strongest commodity producers, some of which the market has crushed recently. Giant commodity companies recently selling at forward P/Es below 8.0 include: the world's largest copper producer (Freeport-McMoRan, FCX, 5.2 P/E), the world largest steel producer (Arcelor Mital, MT, 5.0), the world largest diversified miner (BHP Billiton, BHP, 7.7) and one of the world's largest oil producers (Conoco Philips, COP, 7.2). All are paying current dividend yields of 3.3 percent or above. For inflation-fighting ETF ideas, see:
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