It has been almost nine years since the Federal Reserve (Fed) last raised short-term interest rates. In fact, it has been six years since the Fed lowered rates to 0.00%. After more than six years of recovery and expansion, the Fed is now trying to find the optimal time to increase interest rates.
Over that same six-year period, RAA has largely remained overweight equities as equities remained cheap relative to bonds and other investable assets. Those compelling valuations are now beginning to diminish. As you can see in the graph below, earnings have actually contracted this year relative to last year.
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- Common investor pitfalls
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Disclaimer: This blog is intended for informational purposes only and should not be construed as individual investment advice. Actual recommendations are provided by RAA following consultation and are custom-tailored to each investor’s unique needs and circumstances. The information contained herein is from sources believed to be accurate and reliable. However, RAA accepts no legal responsibility for any errors or omissions. Investments in stocks, bonds and mutual funds may increase or decrease in value. Past performance is no guarantee of future results. Any of the charts and graphs included in this blog are not recommendations for the purchase and sale of any security.