The widespread increase in the cost of goods and services throughout the economy is referred to as inflation. Prices that grow gradually result in better long-term income and profit for businesses (all things equal). Additionally, a company’s stock value rises in parallel with an increase in sales and profit. Therefore, inflationary growth is responsible for a portion of the global increase in stock index levels.

One of the factors that make investing preferable to saving is inflation. Your asset values will rise along with inflation as an investor. However, if you save money, it will eventually lose value.