• Menu
  • Skip to right header navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

MAPsignals

We map big money.

  • Latest Insights
  • Power of MAP
    • MAP Products
    • MAP System
    • White Papers
    • Videos & Interviews
  • Profit with MAP
  • About
    • About MAP
    • MAP Team
    • Authors
    • MAP System
    • MAP Products
    • Big Money Index
  • Members
    • Get Started With MAP
    • My MAP
    • Big Money Charts
    • MAP View
    • MAP View Options
    • MAP Top 20 Weekly
    • MAP 50
    • Member Updates
    • Platinum Updates
    • Members Only Posts
    • Performance
  • Portal
  • Latest Insights
  • Power of MAP
    • MAP Products
    • MAP System
    • White Papers
    • Videos & Interviews
  • Profit with MAP
  • About
    • About MAP
    • MAP Team
    • Authors
    • MAP System
    • MAP Products
    • Big Money Index
  • Members
    • Get Started With MAP
    • My MAP
    • Big Money Charts
    • MAP View
    • MAP View Options
    • MAP Top 20 Weekly
    • MAP 50
    • Member Updates
    • Platinum Updates
    • Members Only Posts
    • Performance
  • Portal

Don’t Fear the Fed

January 2, 2022 //  by Alec Young//  Leave a Comment

As 2022 begins, investors can’t help but wonder how much gas is left in the tank for stocks. The S&P 500 has more than doubled since March 2020.

The Fed tops the Wall Street worry list. Today we’ll cut through the noise to show you why the bears are likely wrong, again. Don’t fear the Fed.

Don't Fear the Fed

With inflation raging, how fast will the Fed raise interest rates to contain it? The bears worry the central bank has waited too long to tame prices, making a major slowdown inevitable as they’re forced to slam the brakes.

Add in omicron and you’ve got a real witches’ brew of uncertainty. It’s a double whammy – it could slow growth and boost inflation, simultaneously. Corporate profits are in jeopardy, so stocks need to fall. That’s the bear case.

And investors are paying attention. Gains have slowed with long-shunned, safer sectors like utilities, staples and health care suddenly springing back to life. Fear abounds. Seems logical, right? After all, everyone knows you “don’t fight the Fed”, especially not during a global pandemic!

Hold on. Before we run for the hills let’s take a deep breath and look at the facts. History shows that Fed rate hikes aren’t a death sentence for stocks. The pace of the hikes is what matters. And with omicron looking relatively benign despite being highly contagious, the supply chain snarls and labor shortages that have spiked inflation are likely peaking. So, the Fed should be able to raise rates gradually.

Let me show you what I mean. Those 4 simple words are ringing loud and clear again: Don’t fear the Fed.

Don’t Fear the Fed

So, get this. When the Fed raises rates slowly stocks do fine. Since 1946, in the six economic cycles when the Fed waited at least one Fed meeting in between each rate hike, the S&P 500 averaged a 10.5% gain in the year after the first move (see chart).

Performance then cooled, averaging only 1.6% in the second year, but that’s still a 12.1% return over two years – below average – but hardly worth bailing over.

Have a look. Don’t fear the Fed.

Don't Fear the Fed

But also notice that when the Fed has tightened quickly, stocks haven’t fared as well, but they’ve held steady. We’ve seen seven cycles where the Fed raised rates in quick succession, hiking at almost every meeting.

Stocks averaged a 2.7% decline in the 12 months following the first hike. But the S&P 500 got that back the following year, averaging a 4.3% gain in year two. So, even when the Fed tightened aggressively, stocks still edged out gains in the two years after they started raising interest rates.

Don’t fear the Fed!

Here’s the bottom line: Fans of MAPsignals know we recommend going against the crowd when fear is extreme. As I’ve said before, no guts no glory.

Just because others are freaking out doesn’t mean you have to. The smarter move is to take a deep breath and look at the facts. Knowing that rate hikes aren’t a market killer is one piece of the investing puzzle.

The other piece is knowing how to pick great market-beating stocks. Consider a subscription to MAPsignals today and become a more informed investor. Combining history’s lessons and awesome market data, you can be proactive when others are worried.

After all, the bears have predicted 5 of the last 2 recessions!

Happy New Year!

-Alec

***ALSO, Luke will be presenting virtually with Wealth365 the week of January 17-22nd: Finding the Biggest Winning Stocks.

It’s totally free, so click the image below and reserve your spot!

Finding the biggest winning stocks

And if you missed our latest video, check it out: Best ETFs for 2022

There is still time to qualify for our giveaway, details in video.


Make sure to like and subscribe to our YouTube channel here!

You can find our other videos here.

Alec Young
Alec Young

Alec Young is an investment strategist, working on Wall Street since 2005. He currently serves as CIO at Tactical Alpha LLC.
Prior to TA, Alec spent 15 years in senior investment strategist roles at major financial firms. Most recently, he served as FTSE Russell’s Managing Director of Global Markets Research. Prior to that, he was VP & Investment Strategist at Oppenheimer Funds and served as Global Equity Strategist at S&P Global.
See his full bio here.

Spread the word!

Category: All, Macro Insights

Previous Post: «Stocks Can Rally in 2022 Stocks Can Rally in 2022
Next Post: Big Money 20 January 2022 »

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Get Big Money Insights for FREE

Want to know where the Big Money is headed?

Just enter your email address below. You'll get our FREE NEWSLETTER sent directly to your inbox.

We call it Big Money Insights... It’s your weekly sneak peek at the powerful market-moving forces that are hidden from 99% of investors.

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Categories

  • All
  • Big Money Insights Weekly
  • Big Money Series
  • Macro Insights
  • MAP In The Media
  • Members Only
  • Performance
  • Podcast
  • Special Reports
  • Stocks
  • Videos & Interviews
  • White Papers

Archives

  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018

Follow us on Twitter

MAPsignals Follow 570 803

MAPsignals - we map the markets.

mapsignals
mapsignals avatar; MAPsignals @mapsignals ·
12 May 1524761713190572032

The #BigMoneyIndex is just days away from reaching #oversold.

It's our most #bullish #signal.

@LukeDowney walks you through today’s landscape and how it compares to prior drawdowns. $SPY $BMI

Read here: https://mapsignals.com/map-blog/a-rare-buy-signal-is-approaching/

Image for the Tweet beginning: The #BigMoneyIndex is just days Twitter feed image.
Reply on Twitter 1524761713190572032 Retweet on Twitter 1524761713190572032 1 Like on Twitter 1524761713190572032 4 Twitter 1524761713190572032
Load More...

Subscribe To Our YouTube Channel

MAPsignals

MAPsignals
#BestOversoldStocks #OversoldStocksToBuy #BestStocksToBuyNow
These are the best oversold stocks to buy now for May 2022.
Latest blog post: https://mapsignals.com/map-blog/

At MAPsignals, we are long-term focused. When solid companies get sold hard, it can be an opportunity. Technology stocks are reaching attractive levels in our opinion. 

Stocks don't go up in a straight line. Pullbacks can offer deals to the patient investor. As markets digest higher inflation, rising interest rates, and a Russian war - great companies will eventually thrive.

Lucas Downey breaks down the following 5 Best Oversold Stocks to Buy Now for May 2022:
1:39 Meta Platforms, Inc. (FB)
3:57 Apple Inc. (AAPL)
6:13 Garmin Ltd. (GRMN) 
8:12 Alphabet Inc. (GOOGL)
10:47 Visa Inc. (V)

Disclosure: Luke holds long positions in GRMN, GOOGL & V in personal and managed accounts at the time of filming.

Learn more at www.MAPsignals.com
Remember this is not personal investment advice of any kind. Make sure to always do your own research when it comes to investing in the stock market. This video is for entertainment purposes only. Our focus is to help investors make sense of markets with data.

Our disclaimer can be found here: https://mapsignals.com/contact/

Music by Karl Casey @ White Bat Audio
Best Oversold Stocks to Buy Now for May 2022
YouTube Video UC4nueJix0bSLmZyilUuCVrQ_oeQ7s1swbKE
Load More... Subscribe

Footer

© 2021 Mapsignals.com

  • Home
  • Contact & Disclaimer
  • Privacy Policy
  • Terms & Conditions
  • Cookie Policy (US)
  • FAQ

Copyright © 2022 · Mai Law Pro on Genesis Framework · WordPress · Log in

✕
The Big Money Index White Paper is Here

Get your copy here and know where the Big Money is headed.

Enter your email address below and you'll get our FREE NEWSLETTER sent directly to your inbox. 

 We call it Big Money Insights... It’s your weekly sneak peek at the powerful market-moving forces that are hidden from 99% of investors.

Manage Cookie Consent
We use cookies to optimize our website and our service.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}