Stanford University economics associate professor Nicholas Bloom knows just what to do when executives and investors don’t: Buy shares.

“All my money is in the stock market,” said the former adviser to the U.K. Treasury Department, who has published three papers studying the impact of uncertainty on the economy.

While heightened insecurity can depress growth by prompting companies to put off investment and hiring, the effect is temporary, according to Bloom’s studies of periods such as the aftermath of the Sept. 11 terror attacks. Within six months, output and employment bounce back as anxiety wanes, he said.

That result echoes research published in 1980 by Federal Reserve Chairman Ben S. Bernanke when he was teaching at Stanford in California. The “resolution of uncertainty,” he wrote, can lead to “an investment boom” by businesses.

James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis, and Joseph Quinlan, chief market strategist at U.S. Trust, Bank of America Private Wealth Management in New York, are betting Bloom is right. Paulsen, whose firm manages about $375 billion, sees the Standard & Poor’s 500 Index ending the year at 1,300 to 1,350, while Quinlan, who helps oversee around $308 billion, forecasts a rise to 1,250.

David Fuller's view Fullermoney's own stock market assessment can be heard daily in the Subscriber's Audio and is also discussed in Comment of the Day.