Research in Focus: Interest Rates and Equity Returns

I’m periodically asked what will happen to stocks when interest rates increase. I don’t have a crystal ball and others much smarter than I have wondered that same question. Here is an interesting short video by Dimensional with Wei Dai, PhD sharing her research findings about the relationship between interest rate changes and equity movements. What happens? Probably less than you’d expect.

Even if you were able to know what was going to happen to interest rates, you probably couldn’t make a profit with that information.