Well, for stocks, the P/E ratio is also extraordinarily high, so it's not inflation there. At least not mostly. The stock market is just overvalued and there will be a correction at some point in the future.
That is: I've got some money to invest. As far as rate of return goes, a stock at a P/E of 10 is about the same as a bond paying 10% interest. (Yes, the stock can go up in price. It can also go down. And so can the bond - when interest rates change, bond prices change. But stock prices factor in expectations of future earnings changes, which bond prices usually don't.)
Now bonds are only paying 4%. That stock P/E of 10 looks really good - so good that people keep buying it, and the price keeps going up, until the P/E is more like 25, which puts it back at approximately the same yield as bonds.
https://www.nasdaq.com/market-activity/stocks/aapl/dividend-...
Regarding dividends, in theory when company spends $1 per share on a dividend, its stock price should go down by $1 to compensate for this. So receiving a dividend is kind of like forced selling a small portion of your stock (except that you don't pay the transaction fee).
The question is, will it correct to levels below its current ones? If you have an answer to that, you can make a lot of money.
If you stayed in through 2008 till now, you'd be doing perfectly fine. If you had to take out money right after the collapse, ouch.
Ultimately your portfolio risk should reflect the cash needs of your age/health/lifestyle in the context of the economics of the time. However, we are in uncharted waters.
I'll take a punt. At some point inflation will take root, and when it does the fed will be in a bind.
Hell, the fed has already been digging away at pensions with their 40 year long put. Pensions funds struggle now to find a positive yield that meets their liabilities.
And homes will at some point come under attack. Perhaps only when everything else is gone, perhaps not. They're a sitting target.