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Economic Growth and Equity Investing

Posted: 18 Feb 2010  

Bradford Cornell

California Institute of Technology

Multiple version iconThere are 2 versions of this paper

Date Written: February 16, 2010


The performance of equity investments is inextricably linked to economic growth. Nonetheless, few studies on investing have explicitly taken research on economic growth into account. This study bridges that gap by examining the implications for equity investing of both theoretical models and empirical results from growth theory. The study concludes that over the long run, investors should anticipate real returns on common stock to average no more than about 4 percent.

Keywords: Relationship of Economic Activity to the Investment Process, Equity Investments, Fundamental Analysis and Valuation Models

Suggested Citation

Cornell, Bradford, Economic Growth and Equity Investing (February 16, 2010). Financial Analysts Journal, Vol. 66, No. 1, 2010. Available at SSRN:

Bradford Cornell (Contact Author)

California Institute of Technology ( email )

Pasadena, CA 91125
United States
310-825-2922 (Phone)
310-206-5455 (Fax)

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