Conventional wisdom is that stocks are a good hedge during inflationary periods. But some prominent financial researchers say the belief is off the mark.

“When inflation has been moderate and stable…equities have performed relatively well,” Elroy Dimson, Paul Marsh, and Mike Staunton of the London Business School write in the 2012 Credit Suisse Global Investment Returns Yearbook, according to MarketWatch’s Howard Gold. “When there has been a leap in inflation, equities have performed less well in real terms,” the professors say. “These sharp jumps in inflation are dangerous for investors. … High inflation reduces equity values.”

Gold notes that the professors found that, during periods of “marked” inflation, equities far outpace bonds, which average a dismal -23.2% real return during such periods. But while equity returns are better, they aren’t good in real terms, averaging -12%.

Over the long term, several strategists, including David Dreman, have shown that inflation eats away tremendously at the returns of bonds. Stocks, in contrast, tend to generate higher nominal overall returns (and companies behind the stocks have the ability to pass some costs on to consumers during inflationary times), so inflation eats away a much lower portion of those nominal returns over the long haul.

But Gold notes that even Wharton Professor and Stocks for the Long Run author Jeremy Siegel, a big proponent in investing in stocks for the long term, has acknowledged stocks’ lack of short-term inflation-beating power. “Over 30-year periods, the return on stocks after inflation is virtually unaffected by the inflation rate,” Siegel wrote in Kiplinger’s last year. “Although stocks do well when annual inflation is in the range of 2% to 5%, their performance begins to falter when inflation exceeds 5%.” That’s because “companies can’t always pass along increased costs, especially in the case of an important raw material, such as oil. As a result, many companies will see their profits squeezed.” Siegel says that “stocks are not good short-term hedges against rapidly increasing inflation, but bonds are worse.”

Dimson, Marsh, and Staunton say that “gold is the only asset that does not have its real value reduced by inflation,” though they add that gold “has generated volatile price fluctuations … There have been long periods when the gold investor was ‘underwater’ in real terms.” They also say that housing is a good hedge against inflation.