Inflation affects the number that you use to value the worth of a company.
Say you buy one share at $10 of a company with a billion outstanding shares. That company is worth, on the market, $10 billion.
Let's say that next year, the company's share price is still $10. Let's also say that inflation in that period was 4%. The company is still worth $10 billion, but each dollar is worth 4% less. The company's total value has dropped.
Inflation didn't cause the total value to drop. The company's value dropped for other reasons (bad sales, company president went crazy, market jitters, whatever causes these things) and inflation simply moved the numbers a bit in the opposite direction.
In short: inflation doesn't affect your returns, but it affects the numbers you use to measure them.
You say "In short: inflation doesn't affect your returns". And thats what I said. But the linked article says the opposite: "High inlfation led to negative returns".
Say you buy one share at $10 of a company with a billion outstanding shares. That company is worth, on the market, $10 billion.
Let's say that next year, the company's share price is still $10. Let's also say that inflation in that period was 4%. The company is still worth $10 billion, but each dollar is worth 4% less. The company's total value has dropped.
Inflation didn't cause the total value to drop. The company's value dropped for other reasons (bad sales, company president went crazy, market jitters, whatever causes these things) and inflation simply moved the numbers a bit in the opposite direction.
In short: inflation doesn't affect your returns, but it affects the numbers you use to measure them.