There are increasing concerns that the economy could enter into a period of stagflation. Stagflation occurs when economic growth slows at the same time inflation levels rise. Investors who are concerned about stagflation returning should consider buying the 3 following stocks: Gold Fields (NYSE:GFI), ConocoPhillips (NYSE:COP), and Google (NASDAQ:GOOGL).There are increasing concerns that the economy could enter into a period of stagflation. Stagflation occurs when economic growth slows at the same time inflation levels rise. Currently, there are concerns that economic growth will be negatively affected by the increase in coronavirus cases and inflation is rising at its fastest pace since 2008.
This would be disastrous for consumers and businesses and would lead to underperformance of stock prices. The last time the US encountered stagflation was in the 1970s, when inflation was elevated due to the Arab oil embargo, the Bretton-Woods agreement which severed the connection between the dollar and gold, and an increase in fiscal deficits due to the expansion of the welfare state and the Vietnam War.
There are some parallels from the period of stagnation during the 1970s to the economic conditions we’re seeing today: the Fed is still aggressively injecting liquidity into markets, we’re seeing record fiscal deficits, and we face the continued challenge in dealing with the coronavirus. Investors who are concerned about stagflation returning should consider buying the 3 following stocks: Gold Fields (GFI), ConocoPhillips (COP), and Google (GOOGL).