It’s tempting to predict runaway 1970s inflation as an April Fools’ Day joke. But at the risk of upsetting our friends in the compliance department, we’ll shoot straight here. With that important disclaimer out of the way, here we provide 10 reasons why we aren’t worried about inflation long term:

1) Technological development. As we learned in our economics 101 textbooks, prices for goods and services tend to be tied to their marginal costs. As technological development continues at a rapid pace, costs to produce and distribute goods and services should continue to fall, putting downward pressure on prices

As we continue LPL Research’s Inflation Week, today we will examine how stocks have historically done at different inflation levels. For more color on our views on inflation, please read here and here, and look out for tomorrow’s blog, where we’ll examine some of the factors that have kept inflation low and that will likely continue to put a lid on inflation in the future.

Looking at S&P 500 Index returns going back to 1950, stocks have tended to like low inflation. As shown below, the lower inflation is, the better the S&P 500 Index returns tend to be, although the strong performance for negative inflat

“History doesn’t repeat itself, but it often rhymes.” Mark Twain

What more can we say other than few months have been kinder to stocks lately than the month of April. In fact, it was last year that saw the S&P 500 Index gain an incredible 12.7%, for one of the greatest one-month gains in history. We noted at the time that 10% or greater months tended to usually kick off strength, not mark the end of it like many were claiming last year. Once again, history looks to have rhymed.

Just how strong has April been lately? “I had to double check, but sure enough, stocks have closed

Inflation is coming and, according to certain market-based inflation metrics, markets are expecting sustained inflation rates not seen since the late 2000s, although likely still at manageable levels. Inflation, which captures price increases in consumer goods and services, is a primary risk for fixed-income investors. For fixed-income investors, who receive fixed coupon and principal payments, the prospects of higher prices for goods and services threatens to erode the value of those fixed-income instruments. Generally speaking, when inflation fears increase, bond prices decrease and rates rise, which is what we’ve seen in the bond mar