Stick to businesses with strong pricing power in a high inflation scenario

Invest in commodity producers that are backward integrated

When inflation rose initially, central banks dismissed it as transient. Now, however, it has become entrenched globally. Retail investors need to watch out for this risk as it could impact their stock portfolios.

Supply disruptions driving inflation   

Consumer price index (CPI) based inflation rose to a five-month high of 5.59 per cent year-on-year in December. It is still within the 2-6 per cent range that the Reserve Bank of India targets. In the United States (US), it touched a 40-year high of 7 per cent in December.

Covid-19 restrictions and lockdowns have led to production disruptions and created shortages. “Transportation bottlenecks, including