Group 1 - The latest data indicates that inflation in the U.S. has not fully eased, prompting investors to reassess which stocks and bonds may be more resilient during periods of rising prices [1] - The core Personal Consumption Expenditures (PCE) price index for July recorded a year-on-year increase of 2.9%, aligning with market expectations but still above the Federal Reserve's long-term target of 2% [1] - Despite expectations for a rate cut by the Federal Reserve after the September meeting, there are concerns that such cuts could also risk pushing inflation higher [1] Group 2 - Broad market investments, such as index funds, typically exhibit good inflation resistance as companies can pass on cost pressures to consumers, adjusting profit levels accordingly [1] - According to research from Hartford Funds, energy stocks and certain Real Estate Investment Trusts (REITs) tend to perform best during inflationary cycles [1] - Energy stocks are naturally linked to energy prices, which are a significant component of inflation indices, thus performing strongly during inflationary periods [2] Group 3 - Currently, the Alerian MLP ETF, with a size of $11 billion, has a yield of 7.8%, while the Vanguard Real Estate ETF, with a size of $64 billion, has an annualized dividend rate of 3.9% [2] - The 10-year U.S. Treasury yield is approximately 4.2%, significantly higher than the 1.5% seen at the beginning of 2022, indicating that bonds can provide more income in the current environment [2] - The 10-year Treasury Inflation-Protected Securities (TIPS) have an actual yield of 1.8%, with the market implying an average inflation expectation of 2.4% over the next decade [2] Group 4 - High-yield bonds ("junk bonds") offer relatively high coupon rates, with the iShares iBoxx U.S. High Yield Corporate Bond ETF yielding 5.8%, compared to 4.4% for investment-grade bond ETFs [3] - However, high-yield bonds carry higher risks and are extremely sensitive to economic conditions, with potential losses if inflation negatively impacts the overall economy [3] - The current spread on junk bonds has narrowed to levels not seen since before the 2007-2008 financial crisis, suggesting that the risk-return profile for investors is not ideal [3]