Investors Hedge Against Inflation with Small-Cap Companies

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The one-two punch of strong consumer demand and seemingly endless supply shortages knocked US inflation up to a 31-year high last month. Naturally, that's led investors to slap on their reading glasses, pull up some spreadsheets from recent history, and ask, "Who does well under inflation?"

One answer: small-cap stocks, which, since 2010, have beat out large-cap competitors when inflation forecasts pointed up, according to CME Group. The suddenly trendy stocks — held in companies valued between $300 million and $2 billion — closed last week on a tear. One index that tracks them, the Russell 2000, has hit four record closes this month alone.

Source Fool.com