This Crestmont Research chart illustrates some surprising historical truth about the US economy and stock prices. They have little correlation.

You might even conclude they have negative correlation (if you look at periods of falling and rising GDP).

(Click on image to enlarge)

Economic growth is not the primary driver of stock market returns; instead, returns are driven primarily by a cycle in the P/E ratio as illustrated by this chart…

(Click on image to enlarge)

As we look for increasing GDP and rising rates by focusing on the change in the slope of the yield curve, consider two ideas to grow and protect investments:

• A laddered portfolio for your bond allocations
• Replacing your stock allocation with a managed futures allocation