Kevin O’Leary Warns Inflation Is Not Going Away — Here’s How You Can Take Advantage
“Shark Tank” star Kevin O’Leary warned that inflationary pressures remain in the U.S. economy, despite the U.S. stock market showing solid growth so far this year.
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“The S&P 500 employs 40% of America,” O’Leary told Fox Business, according to Benzinga. “Where the cracks are starting to show is in mainstream America where the car loans have gone from 5.5% percent to 9.5% and continue to go up.”
Indeed, the S&P 500 Index is up more than 15% year-to-date, yet, according to O’Leary, several factors are adding pressure to the U.S. economy.
Regional Banks Still Under Pressure, Food and Energy Inflation Persist
For instance, as regional banks are still under pressure, lending has slowed down and the cost of borrowing for small businesses has gone up, according to Benzinga. In addition, O’Leary noted that as the price of many necessities remains elevated, “energy and food inflation just won’t go away.”
However, there are still opportunities — and O’Leary said there is a group of companies which stand to benefit from the government’s massive spending bills.
“Where is [the money] going? All into the S&P 500,” he told Fox News. “So if you’re an S&P 500 company, you’ve got clear sailing for the next three to four years.”
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As Benzinga explained, if you want to invest in the S&P 500, there are many exchange-traded funds (ETFs) that provide convenient access.
“Inflation has reduced Americans’ purchasing power by more than 20 percent during the pandemic recovery,” said Thomas Hogan, economist at the American Institute for Economic Research. “But higher prices can benefit certain groups within the economy.”
Hogan noted that investors also tend to benefit during inflationary periods.
“The S&P 500 index, for example, is up by more than 30% from its pre-pandemic peak. Savings rates at many banks and financial institutions are now above 4%, a relief for savers after more than a decade of near-zero rates,” he added.
According to The Motley Fool, some of the best S&P 500 ETFs so far this year include: Fidelity 500 Index Fund, which is up 15.4% year-to-date; Schwab S&P 500 Index Fund, up 16.3% year-to-date; and Vanguard 500 Index Fund Admiral Shares, up 15.4% year-to-date.
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