The Start of the Fed's Easing Cycle: A Signal to Increase Stock Exposure

ChainCatcher reports that the start of the Federal Reserve's easing cycle should be viewed as a strong signal to increase stock exposure.

Chris Galipeau, senior market strategist at Franklin Templeton Institute, says history shows that when the Fed cuts interest rates during periods of economic expansion, the S&P 500 index has averaged a 16.66% gain in the 12 months following the first rate cut. The largest average decline during such periods was only 4.91%. Galipeau points out that since 1990, when the Fed has lowered interest rates, large-cap and small-cap stocks have seen their strongest growth in the 12 months following the first rate cut. "Therefore, we believe any pullback is a buying opportunity," Galipeau adds. (JinShi)