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How to invest to beat the rising cost of living

14/06/2022

The cost of living has dramatically increased in the first half of 2022, with UK households facing the biggest squeeze on their incomes since the mid-1970s. It’s left many investors fearful of what’s to come – but it’s not necessarily all doom and gloom. 

Rising living costs could actually prove to be an opportunity for some investors, with prices and demand both rising across certain markets. Here’s where the experts are suggesting to invest to beat the cost of living. 

 

Food

With discounters like Aldi and Lidl keeping food prices low – and forcing major supermarkets to respond in kind – the UK hasn’t really felt the full effect of food price inflation in recent years. However, that’s all changed. The ONS confirmed at the start of the year that food and non-alcoholic drinks have been a major contributor to rises in inflation.

Fidelity suggests that – with deforestation, floods and droughts all impacting on agriculture – choosing agriculture equities or ETFs could be one way to invest right now.  

 

Investment trusts

Those looking to beat inflation may be tempted by investments that pay regular dividends. Could investment trusts be the answer? 

Portfolio Adviser suggests that this could be the case. In this article, experts explain how the REIT structure can fight inflation, how investors can achieve inflation-linked income, and how to drive performance through dislocations. 

 

Which companies can raise prices? 

Ultra-successful investor Warren Buffett advises looking for businesses who are still able to raise their prices during times of high inflation. By having the power to raise its prices without losing business to a competitor, a company will have the power to offset any increases in cost that it is facing. 

He gives the example of an unregulated toll bridge: the bridge has already been built, and the price to cross it can be raised and still bring in revenue. 

 

How are you planning on investing to beat the rising cost of living?

 

“Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.”

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