GDP Growth and Equity Returns

Many investors look to gross domestic product (GDP) as an indicator of future equity returns. According to the advance GDP estimate released by the Bureau of Economic Analysis (BEA) on April 28, annualized real US GDP growth was 0.5% in the first quarter of 2016 — below the historical average of 3.2%. This might prompt some investors to ask whether below-average quarterly GDP growth has implications for their portfolios.