“In general, inflation is usually negative for stocks,” said Amy Arnott, a portfolio strategist at Morningstar.
Between 1973 and 1981, inflation rose by more than 9% a year. During the same period, stocks shed about 4% annually.
But don’t panic — doing so has never helped an investor.
That’s because these companies are often in industries, such as the financial and consumer staples sectors, that get hit less hard by inflation, Doll said, “These industries tend to perform better because they have more pricing power and are able to increase their prices with inflation better than other industries.”
Other hedges to inflation include investing in real estate, gold and even cryptocurrencies, advisors say.