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What’s flawed in my logic? Isn’t inflation good for the stock market? Shouldn’t we see sky high returns in the stock market soon?
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In the past a chocolate bar cost less than today. In the past, gold cost less than today.

These commodities aren’t actually increasing in price, the dollar is getting weaker.

‘Relative to the dollar’ notice emphasis - relative to the dollar, the cost of chocolate and the cost of Gold rise over time.

We value them the same, but the buying power of the dollar decreases. We are buying them for the same worth, but our medium of purchase (USD) has decreased in value, thus it “costs more” although its value is relatively stable and the same as always.

Today if you hold a 100 dollar bill in hand, about 80 out of those 100 were PRINTED in the last ~24 months.

So it is safe to say we should expect some serious inflation surpassing the ~2% the fed tries to maintain a year. Capping at around 7-10%.

My question is as follows. Apple is a company. It has assets. Buildings. Sales. Land. Etc. Just like chocolate increases relative to inflation, just like gold increases relative to inflation. Shouldn’t stocks, which represent a portion of a company also increase due to inflation? If this is true, why even buy gold? Why not just buy stock, which not only increases relative to inflation like gold, but also increases in value as they accumulate in size?

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2 years ago