RATES AND FORWARD STOCK RETURNS - A contrarians view
Today’s post will be quick and comes from Sean Avory at Avory & Company, a very good stock picker friend of mine. You can find more information about him and his firm here: https://www.avory.xyz/
We’ve had a significant ramp in recession calling and fear, for a lot of good reasons but…
FACTS:
Interest rates, as measured by the 10 YR are down 34% over the last 24 months. Here's when it happened over the last 35 years. The future doesn’t always look like the past, but historically when rates fall this much, there’s a major stimulative effect on the economy. This comes at a time when the masses are over-exposed to “safety assets” and under-exposed to stocks, particularly pro-cyclical ones.
