Rich_by_the_Bay
Moderator Emeritus
Do stocks generally do better as inflation increases? I presumed this is so given how many times we hear that the only way to keep up with inflation is to keep some equities.
If true, I wonder if FC has any correction for stock yields as the inflation rate you select increases. That is, the historic yields given a fixed 3% inflation rate may model one way. If I choose to enter a 5% inflation rate, is it accurate to assume that my returns would be the same as under 3% inflation?
I noticed what a powerful effect inflation has on failure rates, but at the same time I wonder if it is underestimating returns relative to the IR as they rise ahead of CPI, etc.
If true, I wonder if FC has any correction for stock yields as the inflation rate you select increases. That is, the historic yields given a fixed 3% inflation rate may model one way. If I choose to enter a 5% inflation rate, is it accurate to assume that my returns would be the same as under 3% inflation?
I noticed what a powerful effect inflation has on failure rates, but at the same time I wonder if it is underestimating returns relative to the IR as they rise ahead of CPI, etc.