Common stocks beat inflation. I've learned that years ago and I still believe that it's true, as long as inflation doesn't reach 19% like it's been the case this year in Estonia.
And even if inflation reaches 19%, what are your other options? Keeping money in a drawer? That's automatically a negative 19% (if you live in Estonia).
I like these tough periods for the market, because it epurates the market from speculators. And, in the long run, those who are staying in the market will be rewarded. I'm sure about that. And if I allow myself 10 years for this prediction, I'm even more confident.
Some people change their strategies when the market is red, day after day. Some think that stocks will continue to go down, thus investing only in low PE stocks. Like if a low PE couldn't go lower. Well, I've actually tried this before and it's sad, but a low PE can go lower. Yes, a stock with a PE of 8 can become a stock with a PE of 5, just like a stock with a PE of 25 can become a stock with a PE of 18.
I think that dollar stores are a good place to be. Dollar Tree's last results were very good and I believe that results should also be good for Dollarama, Dollar General and Five Below. I'm not a wizard. I only believe that this inflation is way too high for people to keep their habits and paying a premium for the stuff they can buy at dollar stores. Of course, dollar stores will have to readjust their prices because of gas prices. But even if they raise their prices, they'll still be cheaper than almost any other shop.
Eventually, I believe that banks will benefit from rates increase. Because rates can't stay that low. These rates are a part of the explanation of this inflation. People don't save money with such rates. When they'll go up, people will save more money and banks will benefit from that. And currently, banks are not expensive at all.
Of course, I still believe in Google and Mastercard. But I think that dollar stores and banks will benefit from the current situation for the short term.