Stock Talk - Stagflation Nations: What, Where, Why, and How It Can Affect Your Investment Portfolio

Episode Date: May 15, 2026

What does stagflation really mean? Not just the textbook definition of high inflation combined with weak or slowing economic growth, but what it feels like for consumers and investors when essentials like food, energy, and insurance keep rising while wages and job opportunities fail to keep up.   I’ll walk through where stagflation pressures are showing up around the world, including Europe, China, emerging markets, and the United States, and explain the major forces behind it, from energy shocks and overregulation to reshoring, debt, and currency weakness. I’ll also cover the investment implications, including which areas have historically held up better, which have struggled, and how investors may want to think about building a more resilient portfolio focused on real assets, pricing power, stable growth, and diversification.   About Chris Perras, CFA®, CLU®, ChFC®, Chief Investment Officer: As CIO, Chris is the lead investment strategist and director of research at Oak Harvest Financial Group. Chris develops the firm's core market outlook, putting his decades of experience and expertise to work for our clients. He hosts Oak Harvest's podcast, "Stock Talk," available on the website with new episodes each week. He completed his undergraduate studies at Georgia Tech, and went on to obtain an MBA from the Harvard Business School. Driven by a desire to maximize his knowledge and skill set, he acquired financial planning and investment management qualifications, becoming a Chartered Life Underwriter (CLU®), a Chartered Financial Consultant (ChFC®), and a Chartered Financial Analyst (CFA®).   Stock Talk is a weekly vlog/podcast dedicated to discussing the Oak Harvest Financial Group Investment Team's perspective on what's happening in the market. Hosted by Chief Investment Officer Chris Perras, each episode brings you our views on stocks, the market, and the economy with a little education thrown in for good measure. Listen each week and help stay connected to your money!   Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free visit: https://click2retire.com/lets-connect   Important disclosures: Content of Oak Harvest podcasts expresses the views of the speaker and is for informational purposes only. Oak Harvest believes that any data, articles, or information cited are reliable at the time of creation, but does not warrant any information contained herein to be correct, complete, accurate, or timely. References to third-party analysts should not be seen as an endorsement of their views or recommendations, and you should do your own research before investing. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast constitutes personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Any specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.

Okay, investors, we're going to talk about stagflation this week. What, where, why, and how it can affect your investment portfolio. First off, what is stagflation? Let's go ahead and define it. First, the economic textbook term, then the real world and investor world term. Textbook economic definition, stagflation, is a combination of high inflation and slow, slowing, or worse off, negative economic growth. Much the time you have rising unemployment, which can create a breakdown, of the normal economic cycle where inflation and recession occurs together.

In the real world, in the consumer and investors world, prices for essential things like food, energy, and insurance keep rising while wages, job opportunities, and wages versus cost lag, creating a squeeze on consumer spending, leading to a decline in real wages. So where stagflation is showing up today, the top three regions, Europe, especially Germany, in the UK. Why? because, well, Europe spent decades outsourcing their energy independent to Russia and others in favor of more expensive and less reliable clean energy sources. Now, energy shocks from both

Russia-Ukraine war and Iran-Israel war are driving up energy costs and making their sources less reliable. Exactly, when their higher regulation hurts both growth, weak industrial output, and lost market share to China. So the second place, we have some deflation, China. property crisis and its outright deflation, which is now in its 15th year, continues to contribute to weak consumer demand. The deflationary pressures of many trading partners reshoring production, combined with too many labor workers, are mixing with the inflationary effects of higher energy and higher health care costs. Third and finally, think of emerging markets like Turkey and Argentina. Chronic inflation caused by currency flight over decades continues to be paired with unstable growth, and policy missteps. As for the United States, here's where we set. Sticky product inflation

caused by tariffs, reshoring manufacturing, and higher commodity import costs. As far as growth, we are currently accelerating in GDP growth in the second and third quarters after our first quarter slowdown. AI cap-ex spend has largely been the reason for the continued strength in the U.S. economy, first, most other countries. However, given the weakening labor market on a dollar per job basis, as well as higher costs, the odds of stagflation here in the U.S. are increasing for 2007. Third and finally, why stagflation exists in these regions. Generally, five major reasons. Energy dependence and supply shocks. Many countries outsource their energy security and dependence. The Russian conflict exposed this vulnerability and caused an inflation spike.

Another area, over-regulation and weak productivity growth. Heavily regulated and socialized economies continue to struggle to generate real, GDP growth. Think of structural stagnation. Another reason, globalization reversals. Reshoring over the last five years is increasing cost. Supply chains are shifting away from China, causing higher costs, less efficiency. Another area, debt overhangs and policy constraints. High government debt limits. First, GDP limits government stimulus. You can't easily stimulate growth without worsening inflation. Another and final cause, currency rate weakness. Think of Japan and emerging markets. Weak currencies import inflation via

higher commodity prices. Many investors look to gold as their inflation proxy. I look at gold as a currency depreciation proxy. You think gold has risen in dollar terms, look at it in yen terms from Japan or Euro terms from the continent or worse in the currency of an emerging market like Turkey or Argentina. Currencies are relative market games. Finally, what's the impact? to your investments on stagflation. Who are the winners and losers? Remember, this is historically, there are no guarantees of future returns.

So the winners historically. Energy and commodities, which benefit directly from inflation pressures, companies that hold hard asset inventory win as their inventory gets priced higher with inflation. The other area, utilities and infrastructure. Companies with long-term, hard-to-obsolite assets, the Halo Complex, tends to retain

pricing power combined with stable demand. You probably won't shut off your water or electrical utility if you have a choice. Dividend growth stocks. Income does matter when growth is scarce so long as a company can one raise prices to cover costs to grow units marginally. You are generally safe there but beware of companies with a hundred percent pricing gains and units shrinking. That is usually a license for a bad stock. Tips in short-term bonds are usually good areas for investing. Inflation-protected treasuries readjust their coupon with inflation, so they're a better hedge than straight-up treasuries for inflation protection risks. The losers, those historically

challenged, long-duration slow or no-growth stocks. Higher rates can press valuations there. No revenue stocks usually don't work out well as they act like zero coupon bonds. Consumer discretionary, spending weakens as real incomes, incomes relative to inflation fall. Long-term bonds are usually a bad investment. Inflation erodes, real returns. Long-term yield rise so bond prices fall. You would want to own shorter duration bonds, which mature, and then you can repurchase at higher yields in shorter maturities. Another area, higher leverage companies usually don't help your portfolio. Rising interest costs and weak unit growth are horrible inputs for larger leverage companies. Higher interest costs mean cash goes to pay bondholders before shareholders.

What was the FEMA saying when asked, how did you go bankrupt? The answer was slowly at first, then all at once. You don't want to be near any company who's near a tipping point on their debt load. So what's the portfolio takeaway and a stagflation outlook? Shift towards a barbell with true growth combined with real assets, with pricing power, and reduce exposure to interest rate sensitive slow growth and long-duration risks. Investors, stagflation is not just an economic turn. It's a portfolio regime.

shift. The playback moves from aggressive growth risk and expansion to stable compound growth, asset preservation, and resilience. Investors, we all know it's tough to walk. So what do you do in a turbulent geopolitical time like now? What's it best? It's best that you stay focused on what matters to stocks over time. What's that? It's earnings and earnings growth rates. And they are just important right now. They're everything. For now, stay disciplined and stay diversified. and focus on what's real, not what's just exciting. Whether your priority is growth, income, or a combination of both, the Oak Harvest team is here to help you plan for a financial future, no matter where you're at in your career or in your retirement journey.

All content contained with an Oak Harvest podcast expresses the views of the speaker and is for informational purposes only. It is based on information believed to be reliable when created, but any cited data, indicators, statistics, or other sources are not guaranteed. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast should be considered as personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment,

and your investment results may make. differ when compared to an index. Specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss and past performance is not indicative of future results.