Inflation has been a major factor for the investor to consider since around 1940, when the US long-term inflation rate shifted from approximately zero to about 4.5 percent per year. This increase in inflation has not severely impacted the total return for stocks. Cyclical bear markets usually occur during the first two years of the presidential term of office, and cyclical bull markets usually occur during the last two years of the presidential term.
Inflation is devastating for bonds, reducing their total return to one to two percent per year.
Treasury Bills are not a good long-term investment. Their after-inflation return is less than one percent per year. Stock and Bond valuations and yields have shifted dramatically from the 1930's, when deflation was the big fear, to the present, when inflation is of much more concern. However, it is apparent that small capitalization stocks are more volatile than big-cap stocks, and hence will suffer larger losses in a bear market. To paraphrase Peter Lynch, how aggressive you should be depends on how much pain you can take.