CHART: Stocks Love A Little Inflation

This weekend we featured JP Morgan Funds’ Q1 Guide To The Markets published by David Kelly.

One chart that jumped out at us, showed the performance of stocks, bonds, cash, and commodities in various inflation environments.

This chart acts as a reminder that inflation is good for stocks because everyone anticipates that corporate revenue will grow at the same pace as inflation.

Notice when inflation is low and rising — an inflation environment that has occurred seven times since 1972 — stocks have seen returns rise 20 per cent. And in a high and falling inflation environment, that has occurred six times since 1972, stocks have returned 23 per cent.

JP Morgan Guide To Markets

Photo: JP Morgan Funds

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at