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> People in the 1960's thought inflation would be benign for stocks because earnings go up with inflation but the 1970s was a bad decade for stocks. I hear thi
by _ea1k 4y ago
> People in the 1960's thought inflation would be benign for stocks because earnings go up with inflation but the 1970s was a bad decade for stocks.
I hear this a lot. Its true that stock returns relative to inflation weren't great, but what was better? I mean, cash lost a huge percentage of its value. Stocks seemed to pace inflation.
Were bonds a better investment during this period?
- PaulHoule 4y agoGold was the best investment of the 1970s. Harry Browne, who ran for president as a libertarian suggested using gold as a hedge https://www.investopedia.com/terms/p/permanent-portfolio.asp https://www.investopedia.com/terms/p/permanent-portfolio.asp The "all weather" fund from Bridgewater is similar in thinking but substitutes inflation-protected bonds for gold.
- _ea1k 4y agoThank you, that makes a lot of sense and is a perspective that I hadn't thought about.