Re: Inflation
In theory stock prices should keep price with inflation. People spend more the company makes more (in terms of dollars not purchasing more). Then the company has a big cash flow and they can either give higher divident yeilds or buyback stock. They usualy buyback stock which will normally increase the price of stock and since the company will hold more of the stock it also becomes less volitile. So the stock market should go up. However long periods of inflation will really hurt because the buyers can't keep taking the hits of higher prices.
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