As inflation rises, investors look for ways to diversify their portfolios and find opportunities that will help them navigate these difficult economic times. We believe it would be smart to invest in quality banks stocks now, as they are known for their resilience under inflationary circumstances. Wells Fargo (NYSE:), U.S. Bancorp (USB), and KeyCorp (NYSE:) to one’s portfolio. Keep reading. Last week’s higher inflation was a factor in the stock market’s decline. This was the largest increase in 30+ years for the Consumer Price Index, which rose 6.2% to October from one year ago. The rising demand for liquidity has fueled inflation, as well as an increase in supply due to constraints and an economic recovery.

Inflationary pressures are often a reason why cash and bonds have difficulty keeping up with rising inflation. According to personal finance expert Suze Orman, “Only stocks have a track record of earning more than inflation.” Banks, especially, tend to benefit when the Fed tightens its monetary policy because of their asset-sensitive nature. As interest rates rise bank assets, like loans and bonds, can climb faster than liabilities such as deposits. And investors’ interest in the banking stocks is evident in the First Trust Nasdaq Bank ETF’s (FTXO) 3.2% gains over the past month.

So, to contribute to making one’s portfolio inflation-proof, we think it could be wise to scoop up quality banking stocks Wells Fargo & Company (WFC), U.S. Bancorp (USB), and KeyCorp (KEY). The Fed is expected to increase their monetary policy.

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