In this Fisher Investments Market Insights video, our own Chris Wong discusses the relationship between Gross Domestic Product (GDP) and stocks. Or, more specifically, the lack thereof. The stock market and the economy aren’t the same thing, so GDP numbers won’t tell you much about what stocks are doing. GDP is supposed to give you a high-level sense of what the economy did in the recent past. Stocks, on the other hand, are slices of company ownership and are forward-looking as they price in all widely known information. Even the most recent GDP report only tells you what happened in the immediate past, and past performance isn’t indicative of future returns. By the time official number-crunchers unveil GDP data, stocks have already moved on.
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