Does the FIRE 4% rule work in neutral sideways markets?

Sea_Shell

If this current crisis (or any future ones) does turn into full blown depression and we are at serious risk of running out of money, then the wider socioeconomic problems of the country will be biting us in many other ways too and it won't be pretty.

MarkCarnage

An advantage of investing it in shares is that, if inflation does go high, so should the revenues and profits of the stocks you own.

Perhaps so, across a diversified portfolio, but the valuation discount rate for the equity will be a lot higher too, with a lower P/E ratio and a consequent hit to the share price initially. Hence equities may offer a decent, if imperfect, long term hedge against inflation, but there is likely to be a nasty short term hit to capital. Which might take a while to recover. Add in other impacts such as dividend controls as in the UK in mid 70s, or stagflation rather than inflation and it might not look so rosy.