Nike (NKE)

Nike store front in shopping mall. Nike is an American multinational corporation that design, manufacturing, marketing and sales athletic shoes and apparel.
TY Lim/Shutterstock

Nike is a global footwear powerhouse that commands high customer loyalty.

Customers are willing to pay top dollar for signature gear associated with high-profile athletes like LeBron James and Michael Jordan.

Despite inflationary pressures, Nike continues to expand gross margins and post solid returns on equity well above 30%.

The company is also capturing the full price of its products in an increasingly digital, direct-to-consumer business model.

Management believes digital sales could continue to grow from 20% of revenue currently to about 40% of the business by 2025. And price increases could kick in as early as next year.

Amazingly, profit margins may keep expanding, even as operating costs rise with inflation.

Nike shares are up about 19% so far in 2021.

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Apple (AAPL)

Apple store on June 29,2014 in Frankfurt,Germany.Apple Inc. sells consumer electronics, computer software, services and personal computers.
Vytautas Kielaitis/Shutterstock

Global demand for Apple’s premium-priced hardware is growing, as are adoption rates for its high-margin Apple services.

Strong brand identity, user friendliness, and a wide range of fully integrated products are powerful attributes that aren’t going away any time soon.

Customers just can’t afford to live outside the Apple ecosystem. That gives the tech giant more freedom to play with pricing as inflation spikes.

The company’s latest M1 chips, which will gradually replace Intel’s CPUs in every single Mac, underscore its commitment to constant innovation.

Apple’s ability to pass rising costs to a global consumer base without significant loss of sales volumes is undeniable.

Warren Buffett has allowed Apple to grow to 40% of Berkshire Hathaway’s investments portfolio for good reason: The business just keeps growing profits through all economic cycles.

Apple is up about 13% year to date and trades at nearly $150 per share. But if you’re on the fence about jumping in at the current level, some apps might give you a free share of Apple just for signing up.

Levi Strauss & Co. (LEVI)

Various Levis Jeans labels collection close up , product shot
dean bertoncelj/Shutterstock

A market leader in the denim business, Levi Strauss has been firing on all cylinders of late.

Specifically, its well-known brand and a flexible business model have enabled management to grow the top line without sacrificing pricing power.

In the most recent quarter, revenue increased 41% while adjusted gross margin improved 390 basis points to 57.5%.

In fact, management proactively started adjusting its pricing for inflation back in 2020.

The company also sources raw materials from 24 different countries. And that kind of supply chain diversification provides Levi Strauss with plenty of flexibility during times of crisis.

Levi shares are up more than 30% in 2021.

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The ultimate 'forever asset'?

Aerial view of endless lush pastures and farmland.

Warren Buffett once said that his favorite holding period is forever.

But forever is a long time, and since companies rise and fall, growing your wealth by never selling a share may not be the best strategy.

But there might be one inflation safe haven that's worth holding forever — U.S. farmland.

No matter how high or fast consumer prices climb, people still need to eat. And it just so happens that Buffett’s good friend Bill Gates is America’s largest private owner of farmland.

These days, new platforms allow you to invest in U.S. farmland by taking stake in a farm of your choice.

You’ll earn cash income from the leasing fees and crop sales. And of course, you’ll benefit from any long-term appreciation on top of that.

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.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Brian Paradza, CFA

Brian Paradza, CFA


Brian Paradza is a freelance contributor with MoneyWise.

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