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September 4, 2007

Irrefutable proof of the obvious

Charlottesville, Va., Sept. 4, 2007 – In a recently completed study, the authors of many widely-acclaimed articles on Federal Reserve policy and security returns show that Fed rate changes are associated with strong patterns in equity returns. According to the rotation strategy, a more aggressive posture is advocated following decreases in the Fed discount rate and a more defensive posture is recommended following a rate increase. On the heels of the recent Federal Reserve discount rate cut, this timely study seeks to provide some direction to investors.

For their next trick, they will demonstrate that investors who buy low do better than investors who buy high... From the CFA Institute.

Posted by Jay Hancock at 9:48 AM | | Comments (0)
        

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Wednesdays and Fridays.
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