Weekend Reading: Inflation vs. Stock Market Returns
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Weekend Reading
Prices on everything from gas to groceries are on the rise, so if you’re feeling unsettled about how this could impact Wall Street as well, take a moment to view the data.
You might be wondering: Will the inflation headlines ever subside? Prices on everything from gas to groceries are on the rise, so if you’re feeling unsettled about how this could impact Wall Street as well, take a moment to view the data.
What history tells us: While inflation is impossible to predict, we can see in this article that based on market performance of years past, there isn’t a defined correlation or common pattern between the two. The lesson here? Prices might go up, but so do profits.
My thoughts: Inflation will have an impact on the stock market, but what that could be, nobody knows. However, we do know the stock market lost significant value in the past during inflationary times, such as in the 40s and 70s, when double-digit losses occurred over a decade.
Regardless if we’re experiencing inflation or something else, you need a plan to weather those storms. And, over the long-term, we do know the stock market is a great tool as an inflation hedge.