Stock market: 1972 vs 2021
Jun. 22nd, 2021 04:52 pm1972-01-31 FedFunds interest rate was at the bottom at 3.30%.
SPX was rising.
Then FedFunds interest rate started to climb up, but stock market (SPX) kept growing too.
SPX reached the peak only when FedFunds increased up to 5.94%
A bull rally from 1972-10-16 to 1973-01-01 was particularly crazy: SPX grew rapidly in spite of interest rates rising.
My conclusion from this history trip -- is that [in spite of overpriced stock market, we should keep investing into stock market -- close to 100% -- until FedFunds interest rate will start to increase.
The increase in FedFunds interest rate will be our "exit stocks" signal.
If 2022 investors behave similar to 1972 investors, then SPX is not going to fall too much when FedFunds interest rate will start to grow [from the current ultra-low 0.06% FedFunds interest rate].
There should be plenty of time to exit stock market after FedFunds interest rates will start growing again.
https://www.tradingview.com/chart/SPX/ymwxCfvI-Stock-market-1972-vs-2021/

Questions:
1) Is there a reason to believe that investors in 2022 are more likely to start panicking at the first signs of FedFunds interest rate increase [vs 1972 investors]?
2) Do you have an example from history when stock market crashed while interest rates stayed low?
SPX was rising.
Then FedFunds interest rate started to climb up, but stock market (SPX) kept growing too.
SPX reached the peak only when FedFunds increased up to 5.94%
A bull rally from 1972-10-16 to 1973-01-01 was particularly crazy: SPX grew rapidly in spite of interest rates rising.
My conclusion from this history trip -- is that [in spite of overpriced stock market, we should keep investing into stock market -- close to 100% -- until FedFunds interest rate will start to increase.
The increase in FedFunds interest rate will be our "exit stocks" signal.
If 2022 investors behave similar to 1972 investors, then SPX is not going to fall too much when FedFunds interest rate will start to grow [from the current ultra-low 0.06% FedFunds interest rate].
There should be plenty of time to exit stock market after FedFunds interest rates will start growing again.
https://www.tradingview.com/chart/SPX/ymwxCfvI-Stock-market-1972-vs-2021/

Questions:
1) Is there a reason to believe that investors in 2022 are more likely to start panicking at the first signs of FedFunds interest rate increase [vs 1972 investors]?
2) Do you have an example from history when stock market crashed while interest rates stayed low?