Combating Inflation

Investing can help you counteract the negative effects of inflation if your rate of return is greater than the inflation rate. Yet, though you may be able to help offset the effects of inflation, your return will still be in some way affected by it. For example, the unadjusted rate of return on large-cap stocks from 1926-2005 was 10.4%. But, when that return is adjusted for inflation, it ends up being just 7.4%.