Finance Mythbuster: Is Economic Growth Good for Investors?

Finance Mythbuster: Is Economic Growth Good for Investors? by Wesley R. Gray, Ph.D., Alpha Architect  Author, Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors

Is Economic Growth Good for Investors?

• Jay R. Ritter
• A version of the paper can be found here.
• Want a summary of academic papers with alpha? Check out our Academic Research Recap Category!

Abstract:

When measured over long periods of time, the correlation of countries' inflation?adjusted per capita GDP growth and stock returns is negative. This result holds for both developed countries (for which the correlation coefficient is –0.39 using data from 1900–2011) and emerging markets (the correlation is –0.41 over the period 1988–2011). And this means that...

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