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Stocks After Inflation Peaks

Samuel A. Kiburz, Senior Vice President, Chief Investment Officer Oct 18, 2022
S&P 500 return 12 months after peak inflation, 1927 - 2022

Contents

Today's Chart of the Day is in a BlackRock article. This is the organization who issues the iShares Exchange Traded Funds (ETFs) in our portfolios.

The article quotes, “Inflation peaks and market rallies often go hand in hand. Since 1927, the average S&P 500 return in the 12 months following an inflation crest was 11.5%.”

The past is not indicative of future results, and of course due to the unique situation (COVID, supply chain issues, low unemployment, etc.), a relief rally may take longer. However, history does support our long-term view of stocks. 

That view is:

Stocks, although they can experience brutal declines in the short-term, over a long-term period they are historically the best hedge against inflation. This is because companies have the ability to raise prices and generate more profits, which subsequently increases their stock prices.
Chart of the Day

About the Author

Samuel A. Kiburz, Senior Vice President, Chief Investment Officer
Samuel A. Kiburz, Senior Vice President, Chief Investment Officer

Samuel serves as Senior Vice President, Chief Investment Officer for the Crews family of banks. He manages the individual investment holdings of his clients, including individuals, families, foundations, and institutions throughout the State of Florida. Samuel has been involved in banking since 1996 and has more than 20 years experience working in wealth management.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

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