Stocks historically perform well when the Federal Reserve is expansive and poorly when its restrictive, said Robert Johnson, co-author of the new book ‘Invest With The Fed.’ Johnson added that investors should continue to own stocks until the Fed actually changes the direction of rates and should focus on the long term instead of trying to time the announcement. Furthermore, he said developed markets tend to follow the same return patterns as U.S. markets. However, Johnson said emerging market equities and commodities tend to outperform when the Federal Reserve is restrictive.
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