People often advise avoiding Tech stocks during times of inflation. However, surprise, surprise, I think certain Tech stocks represent the best kind of businesses to own during times of inflation. What are they? Let’s find out!
Characteristics of great businesses to own during inflationary periods
Warren Buffett said the best businesses to own during inflationary periods can raise prices during periods of higher inflation and have low capital needs.
1. Ability to raise prices
Inflation causes the price of goods and services and more to rise. This results in an increase in the cost of raw materials and salaries. This will then increase the cost of running businesses. If the business is unable to raise its prices accordingly without losing customers, its profit margin will be under pressure. Additionally, if inflation worsens, they may end up making losses if the cost of creating the goods and services exceeds their selling prices....