zerohedge.com 06 Jun, 2021 23:45 am

Goldman's Clients Are Asking How Various Inflation Regimes Affect Stocks: Here Is The Answer

Goldman's Clients Are Asking How Various Inflation Regimes Affect Stocks: Here Is The Answer
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

Kostin's spin aside, it is undisputable that overall, stocks perform better during periods of low inflation than when inflation is high.Since 1962, both pre-and post-1980, the median monthly US equity market real return during high inflation environments has been an annualized 9% vs.As shown in the chart below, periods of high inflation have corresponded with the outperformance of Health Care, Energy, Real Estate, and Consumer Staples sectors, while Materials and Technology stocks have fared the worst in high inflation environments.Finally, drilling down a little deeper, equity performance has differed greatly in periods where inflation was high and rising versus high and falling.

The median monthly market real return has been 2% annualized in phases where inflation was high and rising vs.15% when inflation was high and falling.

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