Healthcare stocks saw the worst median annualized returns during inflation spikes, according to an analysis by George Mason finance professor Derek Horstmeyer, PhD, published June 5 in the Wall Street Journal.
The analysis was performed by gathering data for all stocks listed on the New York Stock Exchange and Nasdaq over the last 50 years. Dr. Horstmeyer and his assistants then examined the course of the consumer price index over those years and found three price spikes where the inflation rate doubled in less than 24 months: March 1973 to May 1975, April 1978 to September 1980, and February 2021 to March 2022.
Companies were separated into 10 industries: energy, materials, financials, industrials, real estate, tech, utilities, consumer discretionary, consumer staples and healthcare.
Healthcare stocks performed the worst during those spikes, with an median annualized return of minus 8.44 percent, according to the report. Consumer staples (-6.73 percent) consumer discretionary (-5.71 percent), utilities (-4 percent) and technology (-3.64 percent) also had negative annualized returns.
"The negative results for healthcare, tech and consumer discretionary are understandable, because these are interest rate-sensitive industries," Dr. Horstmeyer said in the report.
Energy stocks performed the best, with an 18 percent median annualized return, according to the report.