While losing one’s job is traumatic, a high level of unemployment doesn’t necessarily mean the stock market will suffer. In 2009, for instance, US unemployment climbed above 10 percent, but the S&P 500 leaped 26.5 percent.
This wasn’t an aberration. Typically, the stock market bottoms before the recession ends, but unemployment keeps rising even after the recovery has started. That’s because employers don’t start hiring again until they see clear signs that the economy is back in growth mode.
Because the stock market is often a leading indicator, if you wait for confirmation from falling unemployment to buy stocks, you can really miss out.
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