Excerpt from Business Insider quoting DataTrek co-founder Nick Colas:
….”Investors have been conditioned to believe that the stock market performs poorly when the Federal Reserve hikes interest rates, as a jump in the cost of capital can hurt the financial profile of long-duration assets like growth stocks. But the data tells a different story.
According to DataTrek Research, the S&P 500 has only had two losing years since 1990 when the Fed was raising interest rates: a 9% decline in 2000 and a 4% drop in 2018. That leads the firm to believe that investors need not be concerned about the Fed’s likely start of interest rate hikes sometime next year.
“There are plenty of reasons to be skittish on US large caps (valuation chief among them) but Fed rate hikes aren’t at the top of our list,” DataTrek co-founder Nicholas Colas said in a Friday note”….
Read the full article here on Business Insider!