2 Ways to Beat Inflation and the Food Crisis

Traditional investment strategies may not be sexy, but they’re built to last.

Posted January 17, 2022

Dear Outsider,

To make a little extra money in college, I worked weekends one semester as a painter for the Saint Mary’s County Historical Society, which preserves and restores historic buildings.

I worked on the Brick Chapel, a replica of the first Catholic chapel ever constructed in Maryland.

Here's the completed project...

church

Founded in 1634 and nestled right on the water, Saint Mary's City was Maryland’s first European settlement, built on top of the Secowocomoco Native American village. In fact, St. Mary's was the colonial capital before being moved to Annapolis. The sprawling 800-acre living history museum sits across the road from my alma mater, complete with a full-scale replica of the Maryland Dove (the ship that carried settlers from Europe to Maryland) and a tobacco farm.

We were on the job at 7 a.m., far too early for any college kid. Our task was twofold: carefully build scaffolding up the side of the chapel and paint the mortar in between the bricks. Throughout the project, I had many dreams of me painting white lines.

The catch was that we couldn’t use just any old paint. Because the bricks were laid with traditional lime mortar, we had to use a special kind of paint, not to mention we had to use the same materials and techniques that our early settlers would have used. That meant hand-mixing a clay-based paint in large batches — a mixture of flour, hot and cold water, and powdered clay. And of course we used rabbit hair brushes (even though they cost a little more, lambswool rollers are the absolute best for walls).

It brought together students from all walks of life, and you could tell a lot about a person’s work ethic after being up on the wall with them. It taught me that sometimes the traditional way of doing things is best, that you need a strong foundation to withstand the volatile elements, and that even though it’s boring and monotonous, the journey toward the finished product is worth the time and effort.

The satisfaction that comes from doing something so simple with basic materials is key...

How about a simple solution to the climate mess? Our project lead mused about how white paint reflects more heat than other colors. It’s something that’s since been brought up as a way to combat climate change. In an interview late last year with PBS, Purdue University mechanical engineering professor Xiulin Ruan said he’s developed a bright white paint that he believes will completely reverse global warming and actually allow us to regulate the Earth’s temperature.

His patented paint — made with barium sulfite — reflects 98.1% of sunlight, meaning the surfaces it covers would actually cool down. He says less than 1% of the Earth’s surface would need to be painted white to keep its temperature in check. That means painting roads, bridges, roofs, and pavement, but it could eliminate the need for air conditioning in certain urban areas, further reducing greenhouse gas emissions and lowering energy costs by roughly 75% for some people.

It’s hard to believe such a simple, basic solution could produce such profound results. Geoengineering ain’t sexy, but as we’ve seen time and again in life and investing, it’s often the slow-and-steady strategies that work best. And the following strategies can help you outperform the market this year...

Excuse Me, Your DRIP Is Showing

Want simple, consistent income every year, quarter, or month without losing any sleep? A traditional dividend reinvest plan (DRIP) is the way to go. Some companies will even give you a stock discount if you set up a DRIP through them.

In September of last year, I wrote to you about the following covered call exchange-traded funds (ETFs) that pay monthly dividends. The payouts fluctuate, but as of last month, here’s what we got:

  • The Global X Nasdaq 100 Covered Call ETF (NASDAQ: QYLD) paid nearly 10%, or $0.49 a share.
  • The Credit Suisse X-Links Crude Oil Shares Covered Call ETN (NASDAQ: USOI) paid roughly 15%, or $0.06 a share.
  • The JPMorgan Equity Premium Income ETF (NYSE: JEPI) paid 8.36%, or $0.45 a share.

These funds use the simple strategy of selling covered calls on their holdings and collecting a premium, then distributing that money to shareholders as a dividend. The total returns from my picks are exactly what I want to see...

ETFs

Nothing sexy here, just slow-and-steady growth.

Full disclosure — I’m invested in these ETFs, as well as in activist investor Carl Icahn’s company, Icahn Enterprises (NASDAQ: IEP), which is up 8.9% since I mentioned it in September.

Again, I don’t invest in these to make returns on the stock, but it doesn't hurt. These are pure dividend plays, and you can’t beat Icahn’s sweet $2-per-share dividend.

So if you’re working on building a foundation for your portfolio, this is the year to be aggressively boring. As the saying goes, it’s not timing the market that matters; it’s time in the market.

On the other hand, as the forever war on the pandemic continues, we can't ignore the once-in-a-lifetime investments staring us straight in the face...

The Food Crisis Is Already Here

For the lucky ones, the pandemic has given us a new lease on life, as we were forced to reevaluate ourselves. Many left their jobs while others leaned into the daily grind, working from home, making home-cooked meals, and binge-watching Netflix shows. (It’s not over yet, but a Wall Street Journal article last Friday noted that “in New York, the percentage of positive coronavirus tests has declined every day since its recent peak earlier this month.” This is really good news and perhaps marks the end of the omicron variant’s reign.)

But as long as the government continues using the pandemic as a scapegoat for its failed policies, we'll continue experiencing the collateral damage to our wallets in the form of inflation, rising energy costs, and skyrocketing food prices.

President Biden’s been getting a lot of flak these days for rising gas prices...

OC biden gas prices 1/17/22

And food shortages...

bare shelves

And according to our mining and precious metals expert Luke Burgess, there's only one way to play this food crisis.

In short, fear over the food supply is creating a boon for fertilizer stocks, and one mineral in particular is in high demand but with short supply — the perfect recipe for one company to capitalize on the imbalance.

So make sure to check out Luke's exclusive presentation on the best fertilizer stock to buy right now.

Stay free,

Alexander Boulden
Editor, Outsider Club

After Alexander’s passion for economics and investing drew him to one of the largest financial publishers in the world, where he rubbed elbows with former Chicago Board Options Exchange floor traders, Wall Street hedge fund managers, and International Monetary Fund analysts, he decided to take up the pen and guide others through this new age of investing. Check out his editor's page here.

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