Economic Growth: Great for Everyone but Investors?
While it may be intuitive to presume strong economic growth translates into strong stock market performance, the evidence suggests otherwise.
By 2050 the world's population is projected to reach 9.7 billion, up from 7.4 billion today. Nearly all of that growth will come from emerging markets, where living standards are rapidly improving.
Although these markets have experienced large capital inflows, they still have a long way to go to match developed countries' levels of capital, productivity, and wages. Consequently, emerging markets will likely continue to grow faster than developed markets for the foreseeable future. While this growth may lift hundreds of millions out of poverty and spur investment and innovation, evidence suggests investors may be left behind.
Alex Bryan does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.