How Does Inflation Affect the Stock Market?
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While inflation isn’t positive, its story is far more than just higher gas prices and food costs. Some of today’s rising Inflation is caused by factors that may indicate a strong economy. While there are hurdles to overcome, some inflationary pressures stem from beneficial market forces (which can lead to positive market trends in the long term).
Looking at the market day by day may cause despair. What happens in one day doesn’t matter – it matters what happens on all the days. Consider this perspective: Since 1970, the average rolling annual period saw advancement from stocks around 80% of the time. However, over rolling 10-year holding periods, stocks are up over 92% of the time, and they’re higher 100% of the time for all rolling 15-year periods. That means those with a greater than 10-year investing time horizon have an excellent chance of achieving positive returns.
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