With inflation surging and speculation that the Federal Reserve could soon push up interest rates, ordinary folks saving for long-term goals should consider how resilient equities proved to be during the pandemic and stick with stocks.

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Government-ordered shutdowns caused the most dramatic contraction in the U.S. economy since the Great Depression but in 2020, the Federal Reserve printed $3.1 trillion to effectively finance stimulus payments, aid to small businesses and the unemployed and shore up state finances.

Ordinary folks remained sanguine. After the market tanked 34 percent with the onset of COVID-19, many small investors — enabled by commission free trading pioneered by Robinhood — became traders and others piled up record sums in tax-sheltered retirement vehicles.

Since March of last year, the S&P 500 has rebounded about 85 percent, but how that happened in an economy that displaced 22 million jobs owes a lot to the peculiar nature of the COVID-19 recession.

In considerable measure, permanent business closures were concentrated among small enterprises. And in the commercial centers of progressive cities like New York, Chicago and Seattle that were rocked by riots and looting last summer and burdened by excessive taxation made local economies ripe for jobs’ flight.

Healthy corporations were able to curtail investments to build cash buffers. Those rendered to junk status like Ford were enabled by rock bottom interest rates to raise funds in bond markets.

The private economy proved surprisingly adaptable — Zoom (ZM) and other cloud software replaced jet travel and mundane commuting with the ease that the Gutenberg Press displaced the monk’s quill.

As restaurants, stores and other businesses reopened, encouraging stories abounded about American companies pouring billions into the next generation’s technologies. Consider electric vehicle startups like Tesla and Rivian, Amazon’s Cloud revolution, Apple’s call for engineers to literally invent 6G internet technology and Alphabet’s (GOOGL) Apple’s and GM’s (GM) investments in artificial intelligence for autonomous drive (TSLA, AMZN, AAPL).

With the vaccines rollout a dramatic success, economic growth and corporate profits are now surging. The ordinary investor — the same guy who routed professional short-sellers in the GameStop saga — anticipated all this and poured money into stocks for big gains (GME).

The ordinary investor with courage had few other choices. Treasury securities, CDs and money market funds sported negative real yields, and the important thing to remember is that calculus still applies.

Should the Fed curtail its $120 billion in monthly bond purchases later this year or raise the Federal Funds rate in 2022, the 10-year Treasury rate could rise to 2.5. That’s still on the low-end of the historical range and only in line with expected inflation.

Government bonds, high quality corporate debt and CDs will pay ordinary folks very little or nothing after adjusting for inflation — and negative rates after they pay income taxes.

Only stocks promise returns that outrun consumer prices, even if equity prices at first glance now appear frothy. The S&P 500 is currently selling for about 45 times current earnings, and that’s well above the 25-year average of 26.

The economic recovery is expected to drive up corporate profits by 59 percent in the second quarter. That would lower the S&P 500 price-earnings ratio to 25 — a bit below the 25-year average. And that implies an equivalent interest rate of about 4 percent — well above the likely 10-year Treasury rate even if the Fed tightens monetary policy.

Those returns make stocks look like a bargain and safe haven if investors’ personal circumstances permit them to ride out year-to-year turbulence and invest for 5 years or longer — specifically, their retirement nest eggs and college funds.

For the adventurous, bitcoin may appear to replace gold as the inflation hedge and political-risk asset of choice but like gold, it exhibits a great deal of volatility. Much higher transactions fees than credit and debit cards and IRS tax rules that force capital gains calculations with each purchase make it virtually useless for day-to-day shopping. Consequently, it remains only a speculative investment whose likely ultimate value from current levels is difficult to assess.

Mapping strategies to invest for inflation — such as gold, commodities or rotating out of tech stocks into value stocks — is an obsession in the financial press. Timing those plays and picking the right beaten down stocks is for hedge funds not ordinary investors or even mutual fund managers — that’s why the latter cannot consistently beat the market.

The bottom line is investors should set aside enough cash for emergencies but put long-term savings into a broad-based index fund such as a USAA, Vanguard or Fidelity S&P 500 or broader index fund.