Does inflation increase stock prices?

Inflation can have a mixed effect on stock prices. In the short term, inflation can lead to higher interest rates, which can decrease stock prices. However, in the long term, inflation can lead to an increase in economic growth, which can increase stock prices. Additionally, companies can raise prices to keep pace with inflation, which can increase their profits and therefore their stock prices. Overall, the relationship between inflation and stock prices is complex and can depend on a variety of factors.

The effects of inflation are often not directly felt but are played out over a long time, especially long-term investments are vulnerable to inflation.

 

At Horizon65, we created a mobile app that enabled you to check the effect of inflation on your savings.

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