Last Updated
Apr 5, 2013

Game Changer

MARKET BEWARE SLOWER ECONOMIC GROWTH

There are numerous perspectives about future economic growth. The latest tally includes about 1.5 opinions per economist (reflecting economists’ penchant for the phrase “on the other hand”). Some economists are more optimistic, others more pessimistic, and more than a handful position themselves on both sides of the fence. This article discusses the long-term implications for slower growth in the stock market. Whether your preferred economist advocates 2%, 1%, or 0% long-term growth, the outcome is similar in direction though varying in magnitude. The impact of near-stagnant growth will lie somewhere between bad and worse. Historically, the prospect of slower economic growth has not often been considered by economists and analysts, but it is now accepted in mainstream thinking. The implications of slower growth on stock market returns will be dramatic for investors.