Stocks that do well when inflation is decreasing. Disinflation stocks tend to be in industries that must borrow heavily. Disinflation stocks tend to perform poorly when inflation is high because high inflation leads to higher interest rates, which increases the cost of capital for the companies issuing disinflation stocks. Most utility stocks are disinflation stocks, for example.
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Stock that tends to benefit from a slowdown in the rate of inflation. Disinflation stock, which includes stock of organizations such as utilities and savings and loans, are hurt by high inflation and rising interest rates.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.