Stock market investors should follow this plan for Fed's last rate hike

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Here is the game plan investors should follow if the Fed hikes interest rates for the last time in May

But the results are lopsided, with the end of more recent interest rate hiking cycles generating enormous gains over the ensuing six and 12 months. For example, the S&P 500 surged 35% in the year after the Fed's last rate hike in 1995, and 28% in the year after the Fed's last rate hike in 2018.but stopping before it broke the economy," NDR said.

"More often than not, the Fed causes a recession. In some cases, like 1981 and 2000, the economy fell into recession in a few months. In other cases, like in 1989 and 2006, it took well over a year," NDR said. "The better stock market performance after the end of recent tightening cycles has not translated into small-caps consistently beating large-caps," NDR said. NDR created a high and low quality basket of stocks based on earnings, dividend growth, and overall stability.

 

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