Rate hike cycles follow a pattern most people miss.
First 6 weeks after the Fed's initial hike? The $SPY typically drops 4% on average (data from 7 cycles since 1988).
But here's the part that matters: those losses get erased in the next 5-6 weeks. Markets digest, recalibrate, move on.
Zoom out further:
• 6 months later: +4% average return
• 12 months later: +9% average return
• Only one losing year in that span: 2022
The knee-jerk reaction to rate hikes creates opportunity. History says the initial selloff is noise. The real move comes after everyone's done panicking.
First hikes aren't death sentences. They're reset buttons.
First 6 weeks after the Fed's initial hike? The $SPY typically drops 4% on average (data from 7 cycles since 1988).
But here's the part that matters: those losses get erased in the next 5-6 weeks. Markets digest, recalibrate, move on.
Zoom out further:
• 6 months later: +4% average return
• 12 months later: +9% average return
• Only one losing year in that span: 2022
The knee-jerk reaction to rate hikes creates opportunity. History says the initial selloff is noise. The real move comes after everyone's done panicking.
First hikes aren't death sentences. They're reset buttons.
