Maybe this will help explain the street’s obsession with running any and every piece of data is through a “Fed lens . . .”

As the chart below shows, monthly gains this Fed cycle show two distinct phases: From March 2003 until the June 2004, while the Fed was either easing or held rates at 1%, the S&P’s total return was 39%, or a 2.7% monthly average (in Red, below).

Monthly S&P500 Gains/Losses (7 year)


Sources: Barron’s and Bob Bronson

Since then, the S&P has generated weaker returns — about 18%, or less than 0.6% a month (in Blue, above).


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Quote of the Day: 

“A bull market tends to bail you out of all your mistakes. Conversely, bear markets make you PAY for your mistakes.” 
-Richard Russell, Dow Theory Letters

Category: Federal Reserve, Investing, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

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