How inflation affects stock market?

Inflation can affect the stock market in a number of ways. High inflation can cause interest rates to rise, which can lead to increased borrowing costs for companies and reduced profitability. This can lead to a decline in stock prices. Additionally, high inflation can lead to a decline in purchasing power for consumers, which can negatively impact the overall economy and lead to lower stock prices. On the other hand, low inflation can be positive for the stock market as it can lead to lower borrowing costs for companies and increased purchasing power for consumers, which can boost economic growth and drive stock prices higher.

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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