How do healthcare stocks perform during inflation?
Answers from top 9 papers
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| Papers (9) | Insight |
|---|---|
10 Citations | The results suggest that stocks act as good hedge against inflation both in the long and short runs. |
31 Citations | In combination, results from both high and low inflation regimes suggest that stocks have delivered favorable inflation protection. |
Open access•Posted Content | Also, they reveal that stock prices have a long memory with respect to inflation shocks, such that investors should expect stocks to be a good inflation hedge over a long holding period. |
11 Citations | Low asset growth stocks have greater exposure to the inflation illusion factor than their counterparts, and they are also underpriced at times of high inflation. |
122 Citations | For most of the countries analysed, our results indicate that stocks do maintain their value relative to movements in overall price indexes and this conclusion generally does not depend on whether the source of the inflation shock is from the real or monetary sector. |
Open access•Posted Content | We find that inflation is a significant explanatory factor for the pricing of stocks and government bonds in the two countries. |
Open access•Journal Article 32 Citations | This article shows that differentiating between good and bad inflation news is important to understanding how inflation affects stock market returns. |
30 Citations | This suggests that investors should expect stocks to be a good hedge against inflation over long horizons. |
7 Citations | Overall, common stocks provide a good hedge against inflation in the long run in more than one-third of the cases examined. |
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What is the effect of inflation on stock prices and interest rates?4 answersInflation has a negative and significant effect on stock prices. Interest rates, on the other hand, do not have a significant effect on stock prices. Simultaneously, inflation and interest rates have no effect on stock prices. Partially, inflation has a positive but not significant effect on stock prices. Meanwhile, interest rates have a negative and significant effect on stock prices. Additionally, exchange rates have a negative and significant effect on stock prices. Simultaneously, inflation, interest rates, and exchange rates affect stock prices.
How does inflation affect stock returns?4 answersInflation has a significant impact on stock returns. Studies have shown that inflation risk is priced in stock returns, with inflation risk premia varying over time and even changing sign. Local stock markets adjust sluggishly to changes in local inflation, leading to lower real returns on local stocks when local inflation increases. Individual investors also respond to inflation by buying fewer stocks and selling more stocks when facing higher local inflation. In addition, inflation can proxy for expected future real output and variation in real price/dividend ratios, leading to a negative relationship between short-horizon stock returns and inflation. Furthermore, stock market returns are significantly correlated with inflation and money growth, with certain macroeconomic variables such as CPI, PPI, and monetary aggregates being potential factors affecting equity returns.
How inflation affect stock market return in details?5 answersInflation can affect stock market returns in various ways. Differentiating between good and bad inflation news is important in understanding these effects. Positive and negative inflation shocks can produce different reactions in the stock market depending on the economic state. While some studies suggest that stock returns depend negatively on actual, expected, and unexpected inflation, valuation theory argues that inflation is neutral on equity prices. However, unexpected inflation has been found to affect stock returns in certain countries, while expected inflation does not have a significant impact. The relationship between inflation and stock returns varies across different economies, with some indices showing a negative coefficient and others showing a positive coefficient. Overall, understanding the relationship between inflation and stock market returns can help market participants make informed portfolio decisions and guide policymakers in implementing appropriate monetary policies.
How inflation affect stock market?5 answersInflation has a significant impact on the stock market. Studies have shown that innovations in macroeconomic variables, including inflation, systematically affect stock market returns. Higher inflation leads to higher nominal interest rates and a higher real tax burden on interest income, resulting in a lower stock market participation rate and a decrease in savings. In addition, firms headquartered in countries with higher inflation have investment that is less sensitive to their stock prices compared to firms in countries with lower inflation. This suggests that stock prices are less informative in high inflation countries, leading to lower sensitivity of investment decisions to stock prices. Furthermore, as inflation rises, the ability of financial intermediaries to distinguish among different firms is reduced, potentially resulting in a lack of differentiation among customers.
How inflation has affected healthcare in zimbabwe ?2 answersInflation has had a significant impact on healthcare in Zimbabwe. The country's economic decline, characterized by a collapsed economy, a huge national debt, and recurrent droughts, has led to a deterioration of the health system, resulting in hospitals without basic supplies and health workers regularly striking over unpaid wages and poor working conditions. The introduction of economic reform programs, such as the Economic Structural Adjustment Programs, has further negatively affected the health sector, with policy changes leading to the introduction of user fees and a shift away from the government's previous policy of free health for low-income households. These changes have perpetuated inequalities in healthcare access and utilization, with financing primarily following bigger and higher-level hospitals at the expense of smaller, lower-level ones. Overall, inflation and economic challenges have severely impacted the healthcare system in Zimbabwe, leading to inadequate healthcare infrastructure, shortages of essential medicines and supplies, and limited access to healthcare services.
What is the relationship between inflation and stock market returns?3 answersThe relationship between inflation and stock market returns is a topic that has been extensively studied. In industrialized economies, most studies have shown a negative relationship between the two variables. However, the relationship can vary over time. In the United States, for example, the correlation between inflation and stock prices has been positive in certain periods, such as the 1840s, 1860s, 1930s, and 2011, and negative in other periods. In Nigeria, stock market returns have been found to provide an effective hedge against inflation. In African countries, including Kenya and Nigeria, there is evidence of a positive relationship between inflation and stock returns, suggesting that stocks can act as a hedge against inflation over long horizons. Overall, the relationship between inflation and stock market returns is complex and can vary depending on the country and time period.