Taking into account the inflation factor when diversifying financial investments

Effective portfolio investments rely on a wide range of analytics, both at the macroeconomic level and reflecting various aspects of the issuers’ activities. Among the macroeconomic indicators characterizing the state of the economy, the inflation rate plays an important role. The influence of the level and dynamics of inflation on the stock market return is debatable, which was revealed by the authors of the article as a result of studying the research of a number of stock markets in the scientific works of foreign and Russian scientists. The purpose of the study conducted by the authors is to analyze the impact of inflation on the return and risk of investments in order to use the obtained results in the diversification of financial investments. In this paper, an analysis of 27 major stock indices of the countries of America and the Asia-Pacific regions from 2010 to 2024 was carried out. The results of the correlation analysis showed that the level and dynamics of inflation are not priority factors that should be taken into account when deciding on investing in certain stock instruments. The authors noted that investing in indices during high inflation and a long investment period may lead to higher returns, but further research is needed to confirm this hypothesis.

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