Investors may wonder whether stock returns will suffer if inflation keeps rising. But a look at equity performance in the past three decades does not show any reliable connection between periods of high (or low) inflation and US stock returns.

  • While 2022 saw high inflation and poor stock returns, there have been other periods with high inflation and strong stock market performance.
  • Twenty-two of the past 30 years saw positive stock returns even after adjusting for the impact of inflation.
  • Over the period charted, the S&P 500 posted an annualized compound return of 7.0% after adjusting for inflation.

History shows that stocks tend to outpace inflation over time—a valuable reminder for investors concerned about rising prices.