TY - JOUR
T1 - Is fed policy still relevant for investors?
AU - Conover, C. Mitchell
AU - Jensen, Gerald R.
AU - Johnson, Robert R.
AU - Mercer, Jeffrey M.
PY - 2005
Y1 - 2005
N2 - Thirty-eight years of U.S. data indicate that U.S. monetary policy continues to have a strong relationship with security returns. U.S. stock returns are consistently higher and less volatile when the Federal Reserve is following an expansive monetary policy. Furthermore, the monetary policy-related return patterns of companies considered to be most sensitive to changes in monetary conditions are much more pronounced than average patterns. Finally, the influence of U.S. monetary policy is global; international indexes have return patterns similar to those for the U.S. market. Overall, the evidence suggests that investment professionals should continue to consider monetary conditions when performing fundamental analysis of U.S. and international securities.
AB - Thirty-eight years of U.S. data indicate that U.S. monetary policy continues to have a strong relationship with security returns. U.S. stock returns are consistently higher and less volatile when the Federal Reserve is following an expansive monetary policy. Furthermore, the monetary policy-related return patterns of companies considered to be most sensitive to changes in monetary conditions are much more pronounced than average patterns. Finally, the influence of U.S. monetary policy is global; international indexes have return patterns similar to those for the U.S. market. Overall, the evidence suggests that investment professionals should continue to consider monetary conditions when performing fundamental analysis of U.S. and international securities.
UR - http://www.scopus.com/inward/record.url?scp=13844255521&partnerID=8YFLogxK
U2 - 10.2469/faj.v61.n1.2685
DO - 10.2469/faj.v61.n1.2685
M3 - Article
AN - SCOPUS:13844255521
SN - 0015-198X
VL - 61
SP - 70
EP - 79
JO - Financial Analysts Journal
JF - Financial Analysts Journal
IS - 1
ER -