Content courtesy of Dimensional Fund Advisors.
Do periods of higher inflation spell bad news for stock investors? Not according to history. Since 1950, stocks have beat the annual inflation rate in 73% of the calendar years. The most recent exception was in 2022, when inflation outperformed stocks. But over the long run, stocks have rewarded investors with positive average returns, even after adjusting for inflation. Sticking with your investment plan can increase your odds of staying ahead of rising prices.