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Comment by ivalm | Hacker News Reader

> Maybe it's because inflation is actually bad for the moderately affluent who made a disproportionate share of their income early in life and want to live off that nest egg while no longer working (which I assume to be overrepresented on HN).

But I am guessing that group has equities, which are somewhat inflation proof (especially if growth focused).

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Only some equities are inflation proof. Other equities will be crushed by inflation because inflation will put pressure on higher interest rates and companies with high debt loads will get crushed by higher rates.

High debt loads are relatively easier to carry as inflation spikes. Inflationary pressures on interest rates will only hurt companies who need to roll over their debt. Most companies will realize that going to the market by issuing new stock is a cheaper cost of capital.

>But I am guessing that group has equities, which are somewhat inflation proof (especially if growth focused)

Trust me, with my own portfolio, I wish that were true, but future expectations of inflation force you to discount future cash flows more, making (all else equal) growth worth less.

The real problem the 'HN rest and vest' crowd has with inflation is that while wages have shown a great ability to adjust (upward) to match inflation, stock market returns are less likely to do so.

Equities of "quality" companies are inflation proof. Exclusively growth focused companies tend to die out during the next recession. That's why value investing outperforms the market over the long term and underperforms it over the short term.

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