Having Your Cake and Eating It Too: How to Get the Most from Your Investments

Prather, Laurie; Bertin, William J.
February 1998
Journal of Financial Planning;Feb1998, Vol. 11 Issue 1, p82
Academic Journal
This article examines an investment strategy and provides financial planners and investors with a simple trading rule based on fundamental economic principles. The underlying rationale is that directional changes in interest rates will signal future stock market trends. Thus, allocating funds across investment vehicles consistent with the interest-rate-change signals enables financial planners to make recommendations that capture the gains of rising stock markets and that avoid the losses of declining markets. The trading strategy tested here is shown to be successful in achieving a seemingly impossible outcome: the realization of above-market returns with below-market risk.


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