Microsoft

Microsoft Azure
DANIEL CONSTANTE / Shutterstock

It may not get the publicity it once did, but Microsoft’s tech is everywhere. And the company’s cloud computing expertise should allow it to earn a fair chunk of a market that tech research firm Gartner says could grow to more than $360 billion in 2022.

Cloud computing is both the present and future of business. In companies of a certain size, it’s a must; they simply don’t have the option of cutting back on reliable cloud services — and Microsoft’s Azure definitely qualifies — just because inflation is driving prices higher.

In fact, it was growth in Azure revenue that helped Microsoft smash its revenue target by almost $3 billion in the second quarter of 2021. This year, the company’s stock is up 56%.

You might be able to put off the purchase of a new Windows laptop because of higher prices, but thousands of companies running Azure don’t have the same flexibility.

On that note, if today’s high prices are tempting you to stop buying stocks, remember you can always build a portfolio using nothing more than your “spare change.”

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PayPal

PayPal offices
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Just because prices are going up, it doesn’t mean people have cut back on using PayPal. The online payment leader processed over $1 trillion worth of transactions in the last year, taking a tasty little nibble out of each one.

Inflation is actually great news for PayPal. It can collect higher fees from each payment without having to raise prices on its own.

PayPal has set itself up for long-term success, too. In addition to the 32 million merchants who use its primary services, the company has expanded into credit cards, QR code payments and point-of-sale software, making it a player both on- and offline.

PayPal stock is hovering around $190 a share. That’s down about 18% since the beginning of the year — but if it’s still too pricey, you can always use an app that allows you to buy fractions of shares. That way you can invest with as much money as you’re willing to spend.

JPMorgan

Man walks in front of a JPMorgan bank
Bumble Dee / Shutterstock

Banks tend to do well when inflation rears its ugly head. The Fed increases interest rates, and banks begin generating revenue by offering more expensive loans and mortgages.

And if you’re going to roll the dice on a bank, going with America’s largest isn’t a bad strategy.

JPMorgan just wrapped up a solid third quarter, with a 19% increase in deposits year-over-year, net interest income beating expectations by around $200 million and investment banking revenue up 50% versus the same period last year.

And that was all during a period when interest rates were at record lows. A little tightening by the Fed, and things could be looking even sweeter.

JPMorgan stock has been on a tear this year — it’s up 30% since the calendar flipped over — so if you’re planning to nab some shares, waiting may not be in your best interest.

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Another inflation hedge with growth potential

Woman farmer with digital tablet on a background of combine harvester. Smart farming concept.
Scharfsinn / Shutterstock

If rising inflation makes you hesitant about the stock market altogether, it may be time to take a look at a real asset that can generate some real returns.

An investment in productive U.S. farmland could put you on the right side of both rising commodity and land prices. And with the global population continuing to grow, it’s not like the demand for food will decrease any time soon.

Farmland used to be off-limits to the average investor, but not anymore. Thanks to a new investment platform, securing a stake in multiple thriving farms is as simple as planting your money and watching it grow.

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

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About the Author

Clayton Jarvis

Clayton Jarvis

Reporter

Clayton Jarvis is a mortgage reporter at MoneyWise. Prior to joining the MoneyWise team, Clay wrote for and edited a variety of real estate publications, including Canadian Real Estate Wealth, Real Estate Professional, Mortgage Broker News, Canadian Mortgage Professional, and Mortgage Professional America.

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