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Friday, August 18, 2017

How Stock Market returns are affected by GDP growth and Inflation

"For stock market investors, annual growth in the GDP is vital. If overall economic output is declining or merely holding steady, most companies will not be able to increase their profits, which is the primary driver of stock performance.

However, too much GDP growth is also dangerous, as it will most likely come with an increase in inflation, which erodes stock market gains by making our money (and future corporate profits) less valuable."

In a recent article in investopedia.com, Ryan Barnes explains the importance of GDP and inflation for investors. Read the article here.

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