Rising rates pave way for rising stocks
Stocks and bond prices share common ties
Investor optimism usually drops when rates start to rise, but John Wasik claims in his Reuters column that rising rates and stock prices can definitely herald a brighter economic fortune in the short term.
If there is a takeaway from the relationship between stock and bond prices, it is that at a certain point investors cease to become optimistic about an improving economy, a crisis strikes or the stock market becomes irrationally exuberant. Although it is nearly impossible to predict when cycles end, holding a mix of stocks and bonds is still a rational move.