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The Case for Buying Bank Stocks Before Fed Raises Rates

The final months before a Federal Reserve interest-rate increase have historically been a good time to own stocks, so long as you pick the right industries.

The Standard & Poor’s 500 Index has averaged a gain of almost 13 percent in the nine months before the first rate rise following a pause, according to a Bespoke Investment Group study of three policy changes in the last 21 years. The average gain has been 6.3 percent in the three months before 11 increases dating back to 1963, according to a separate report from Birinyi Associates Inc.