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      09-29-2021, 07:39 AM   #40

Drives: Potato
Join Date: Feb 2012
Location: USA

iTrader: (1)

Originally Posted by chassis View Post
I spent 5 more minutes and found the solution to inflation in 1975: invest in equities.

12%+ annual return from 1975 to 1981. 2000cs in 2021, don't worry about inflation, invest in equities.

The previous chart was SP500 price only. The chart below includes dividend reinvestment.
That is nearly always true and certainly over long time periods. The question is in the inflation scenario, are there equity sectors that do better and others that do worse (not individual stocks)? Like maybe bank stocks would do well because they can increase their lending spread, but autos would do poorly because there is too much price competition and rising interest rates put off consumers.

Many things have changed since the 1970/80s so there could be some good arguments to avoid simply repeating what worked then. For example oil and nat gas were to some extent the cause of the inflation (OPEC price shocks in the 70s) and reserves priced up as a result. But today with carbon concerns on top of lack of oil price increases, the sector might be a dog. And earlier I kept mentioning REITs because I wonder if perhaps they are a better way to play real estate these days than trying to own and manage multiple properties oneself.
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