Last month, the Fed took a drastic step to cut rate twice by a total of 125 basis points. And with a drop of 225 basis points since last fall, what does this say about likely stock returns? Let’s look at the historical data.

Since 1950, the Fed cut more than 200 basis points 11 times in attempts to simulate a faltering economy. Economists believe it takes six months for the rate cuts to take effect which should last for as long as three years. Therefore I examined the one- and three-year returns of the S&P 500 Index and the Fama/French Small Cap Value benchmark portfolio for each rate-cut period.

After cuts of 200+ basis points, the average one-year return for the S&P 500 was 13.5% with two negative-return periods. The average three-year returns for the S&P 500 was 31.8% with one negative-return period.

However, the Fama/French Small Cap Value benchmark portfolio fared better. The one-year average return is 34.5% with no negative returns. The three-year average return was 100.5% with just one negative-return period.

Periods of rate cuts	S&P500	S/V*	S&P500	S/V*

of 200bp or more	1y ret	1y ret	3y ret	3y ret

Oct 1957 - Mar 1958 	32% 	64% 	55% 	106%

Apr 1960 - Jan 1961 	11% 	23% 	25% 	47%

Apr 1970 - Nov 1970 	8% 	12% 	10% 	-1%

Jul 1974 - Oct 1974 	21% 	34% 	25% 	149%

Apr 1980 - May 1980 	-19% 	46% 	46% 	175%

Jan 1981 - Feb 1981 	-14% 	10% 	20% 	131%

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Over the earlier couple of yrs, cryptocurrency has been a very hot subject across the globe. Most individuals are now familiar with cryptocurrency, specially Bitcoin. As a make a difference of simple fact, Bitcoin is on major of the checklist of cryptocurrencies. If you have no thought why the cryptocurrency is mounting in popularity all over the world, you are on the correct web site. In this posting, we are likely to explore 5 reasons why this new kind of currency is so common. Go through on to uncover out more.

1. Low transaction charges

The lower transaction charge is a person of the primary motives why cryptocurrency has been increasing in worth more than the past number of many years. No matter what kind of standard payment process you go for, you will have to fork out a significant transaction cost.

On the other hand, if you go for cryptocurrency for creating payments, you will have to pay back minimum amount transaction service fees. Consequently, it would make sense to use this new form of forex for producing payments on line for your wished-for items and solutions.

2. No federal government regulation

A different sound rationale why a large amount of individuals have confidence in cryptocurrencies is that they are not regulated by any govt. As a result, the worth of the currency remains steady irrespective of the authorities of a distinct nation.

Also, some investors want to defend their wealth, which is why they invest in cryptocurrencies. In … Read more