I've been thinking lately, why do so many people still stick to bank fixed deposits during high inflation periods? Let me give a simple example to make it clear.

Suppose you have 1 million yuan at the beginning of 2024, and a bowl of beef noodles costs 200 yuan at that time, enough to eat 5,000 bowls. After two years, with an inflation rate of 3% and a bank interest rate of only 1.5%, your deposit grows to just over 1.03 million yuan, seeming like you've made a profit. But now, the same bowl of noodles costs 212 yuan, so your 1.03 million can only buy about 4,859 bowls. You've lost about 141 bowls invisibly—that's the purchasing power quietly eaten away by inflation. So rather than lying back and letting inflation erode your wealth, it's better to find assets that can truly outpace inflation.

By mid-2026, inflation remains stubbornly sticky. Service industry costs continue to rise, and geopolitical energy shocks haven't stopped, keeping price pressures above the targets set by central banks worldwide. In this environment, knowing how to select inflation-related stocks becomes the key to whether you'll make money this year.

Recently, I've been focusing on four types of assets. First are essential consumer goods and retail giants. During inflation, consumers look for cheaper substitutes, and companies like Walmart and Costco can seize market share. They have strong brand power, and even when prices rise, customers still buy. For example, Procter & Gamble (PG) owns many household essential brands with high loyalty, offering significant room for price increases. In Taiwan, Uni-President (1216), as a dominant food retailer, is a stable choice among inflation concept stocks.

Second are financial stocks. Although the market expects interest rates to adjust slightly, the environment in 2026 is still relatively high. Banks' net interest margins will expand, benefiting giants like JPMorgan Chase (JPM) and Bank of America (BAC). In Taiwan, Yuanta Financial (2885), with active trading and stable interest rates, also has a healthy profit structure.

Third are hard assets and raw materials. Inflation is essentially currency depreciation, so tangible resources have better hedging value. As low-earth orbit satellite construction peaks and AI data centers' electricity demand surges, the demand for copper and lithium is particularly rigid. Freeport-McMoRan (FCX), the world's largest publicly traded copper miner, and Albemarle (ALB), which controls lithium mines, can directly pass costs onto end customers. ExxonMobil (XOM) profits handsomely when oil prices rise and can also pay stable dividends.

Lastly are industries with strong pricing power, such as licensed sectors. TSMC (2330) almost monopolizes advanced process chips, heavily relied upon by AI chip manufacturers, giving it absolute pricing power. Microsoft (MSFT) has high stickiness in enterprise software and cloud services, with high customer switching costs, making price hikes difficult to resist. Luxury brands like Louis Vuitton (LVMHF) have customers who are less sensitive to prices; raising prices can even enhance their sense of scarcity.

Honestly, market volatility in 2026 will still be relatively high, with geopolitical risks potentially pushing gold or oil prices higher at any time. Instead of passively holding stocks, it's better to take proactive actions. You can deploy assets in phases to cope with short-term fluctuations during inflation data releases, and flexibly use derivatives to hedge or profit from sharp commodity swings. Also, don't forget to focus on companies with dividend growth rates exceeding inflation; during inflation, cash flow is often more reliable than anything else.

Ultimately, inflation itself isn't the real threat; what's dangerous is letting your asset allocation lag behind price increases. By choosing the right inflation-related stocks and utilizing diversified strategies, you can not only hedge against inflation and preserve wealth but also seize the opportunity to create exponential wealth during this wave of rising prices.