Monday, December 20, 2010

Should Investors Fear A Dismal Economy

By Arianna Capital

We have recently encountered many people in our lives who fear the economic state of the United States. So, we have decided to respond - the reality may be less dismal than it seems.

In this video, Kenneth French explains why lower economic growth may not hinder future stock returns. In fact, history shows that average returns tend to be higher during periods of economic difficulty. The information about a current recession is factored into stock prices, and investors may require a higher expected return to induce them to take higher perceived risk.

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