Guides · Stocks, ETFs and markets
Does the stock market protect against inflation?
In short: Over the long term, stocks have often beaten inflation, because companies can raise their prices. In the short term, high inflation and rising rates often push markets down, as in 2022.
Inflation's effect on savings
With 4% inflation, $1,000 loses about $40 of purchasing power in a year if it earns nothing.
Why stocks hold up over time
Companies' sales and profits rise partly with prices.
The 2022 example
High inflation and fast rate hikes: stocks and bonds fell at the same time, which is rare.