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As a value investor, I’m always looking for the best stocks to buy for my portfolio. That means looking at whether certain stocks are cheap. However, there are also times when buying stocks just makes sense because of historical trends or economic theory.
No recession, no worries
While past performance doesn’t guarantee future returns, I found an intriguing relationship between FTSE 100 shares and interest rates. Over the past five rate-cutting cycles, UK stocks have typically risen in the 12 months after the first rate cut is instigated. This pattern holds special relevance now, as the Bank of England moves towards rate cuts and the FTSE has boasted positive returns in four of the last five cycles, one year after the first rate cut.
UK stocks have shown remarkable resilience during past rate-cutting cycles, as the FTSE 100 even posted impressive gains during the 1990-1991…
