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Would you buy a stock that is guaranteed to stay flat for the discernible future? No? Then you have your answer.

(let's not forget that, thanks to inflation, 'flat' is actually losing money over time.)



If a that stock over time covers inflation and pays a dividend, absolutely.


You're leaving beta. Any stock that fluctuates with the market is expected to have a much higher return than inflation, and with good reason.


Presumably the parent meant a stock whose share price tracks inflation in spite of its dividend. So if you reinvest the dividend, you beat inflation and potentially beat the market, depending on the dividend yield.


At that point wouldn't bonds make more sense? Seems like the risk vs. reward balance is skewed the wrong way if you own a piece of stock that stays flat.


If inflation shoots up, your bond will have the same payout but one can at least hope that dividends rise accordingly.


On the flip side, if the company goes bankrupt, bond holders are at or near the front of the line to be made whole.


Given that I generally hold for income rather than value, that's precisely what I look for. The last thing I want is a security that goes up in (real) value since that means they're not paying me the dividends they could.




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