Fear sells. Lately, it seems like every time I open a finance-dedicated website or turn on similarly oriented news networks, there’s nothing but negativity. The bulk of the articles at the top of the page, or the stories being told to me by the anchors, deal with the next pending disaster for the economy and stocks.
Before we go any further, I want to make sure you understand the relationship between cryptocurrencies and stocks. In the eyes of momentum investors like hedge funds, both are viewed as risk assets. So, they’ll tend to move in similar directions up and down. A great way to see this is by looking at the S&P 500’s average annual return. We’re able to pull the data going back to 1928, giving us almost 100 years’ worth of numbers.
But, by stretching back that far, I was able to come across nine different cycles when the Fed was cutting interest rates. The following table details the S&P 500’s total return once easing started…