Don’t Get Spooked Out

“Invest in inflation. It’s the only thing going up.” –Will Rogers


Predicting inflation has never been easy. It’s even more difficult now with the combination of the pandemic and unprecedented government spending. Prices are definitely rising across the board but whether this is a one-time transitory spike or not remains to be seen.

So, what does this all mean for our investments? Let’s look at some historical data to help put things in perspective. Here’s a cart that shows the highest calendar years of inflation and the related stock market returns.

Clearly, there is no pattern here. Even in the highest inflationary times the stock market has held up pretty well. In fact, the average return over these years was 9.4%. That’s essentially the long-term average over the last 90 years.
Bottom line, look at the data and don’t let the fear of inflation spook you out of the markets.