Could a rate hike help stocks? A look at the 2013 "taper tantrum" might reveal the answer.
Bonds have had traditionally been the “safe” investment in a portfolio, expected to deliver lessor returns than stocks but also to provide critical balance to a portfolio, particularly during crisis. But for the second year in a row, it is bond funds that have been outperforming stocks, a recent JPMorgan report notes. This performance leadership could change with an interest rate hike forthcoming – and stocks could benefit from a rise in interest rates, the October 21 "Flows and Liquidity" report concludes.
