What Every Investor Should Understand About Stagflation—but Often Doesn’t

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Remember the 1970s and stagflation? Here is how it applies, and doesn't, today.

The prospect that inflation’s recent spike may be more than transitory, coupled with the possibility the economy will grow slowly, has raised the specter of the “stagflation” era of 50 years ago.

But be careful about making investment decisions based on what happened in that era—marked by a combination of stagnant growth and higher inflation. While the general outlines of the stagflation era are widely known, there are many misconceptions about how particular asset classes fared.

 

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