When the market narrative becomes too widely accepted, excess seems to be created in some areas of the economy as businesses prepare for what’s coming their way. Today’s stock market seems to be focused on one theme and one theme only: stagflation. This rare economic condition, not seen since the 1970s, poses a particular risk for investors, though not one that can’t be hedged or managed.
But before investors learn about these strategies and safety stocks, they must first understand stagflation. Simply put, it is an economic state of low economic growth as measured by the GDP numbers, other business activity readings, and an elevated inflation rate, hence the name's stagnant nature.
