Stagflation has been out of the public lexicon since the Greenspan era, but as inflation begins to gradually creep up again that word is beginning to seem like a higher probability. Inflation has climbed to 8.5% and growth is expected to slow dramatically for 2021Q1 to 1.7%. Small-cap is a great option during these times because they are a great alternative partially in Finance. Preferred Bank is a great option with earnings estimates rising and is moving into a bullish category on Wallstreet. Others to watch out for are Mercantile Bank Corp and Old Second Bancorp as they are also well-positioned small-cap financials to stave off stagflation.
Finsum: It's amazing that equities are the most stabilizing force on Wallstreet right now, but small-cap might just be the play as volatility rises.
- bonds
- hedging
- inflation
- volatility
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