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Post by Mustang on Dec 13, 2023 9:14:24 GMT
retiredat48 , I agree stocks hedge against inflation as long as the Fed doesn't raise interest rates. Both stocks and bonds are adverse to rising rates. Normally stocks and bonds have a negative correlation. The Fed with its near zero rate policy screwed things up. It meant that fixed income assets had almost no return forcing money into the stock market. Long-term P/E ratio for the S&P500 is around 17. The market rose to around 40. Once fixed income became an alternative again money started flowing back. Money market and savings accounts started having a return again. I agree with others, this is more of a return to normal than anything else.
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