RT Journal Article
SR Electronic
T1 Practical Applications of Labor Conditions and Future Capital Market Performance
JF Practical Applications
FD Institutional Investor Journals
SP 1
OP 4
DO 10.3905/pa.2017.4.4.213
VO 4
IS 4
A1 Rob Arnott
A1 Feifei Li
A1 Xi Liu
A1 Riva Atlas
YR 2017
UL https://pm-research.com/content/4/4/1.4.abstract
AB Labor Conditions and Future Capital Market Performance Rob Arnott Feifei Li Xi Liu In this article co-authored by his Research Affiliates colleagues Feifei Li and Xi Liu , Rob Arnott revisits earlier work that looked at the relationship between employment data and market returns updating the findings with new data from the years following the financial crisis. They find that their contrarian instincts are still borne out by the empirical evidence: Labor markets and investment performance are even more strongly correlated than they appeared to be in the earlier research.The authors encourage investors not to panic during the height of recessions, when unemployment is high and future returns look dicey. "We wanted investors to realize they should not make investment decisions based on fear. Rather, recognize that the weakness in the labor markets are likely to show you the light at the end of the tunnel, with the capital markets potentially giving you payoff in the near future," explains Li.Li and Liu stress that their intended audience is the investor community, not policymakers.TOPICS: Performance measurement, financial crises and financial market history