Depressed interest rates were typically associated with weak market
outcomes over the following decade, largely because investors reacted to depressed interest rates with yield - seeking speculation - driving valuations up and driving subsequent prospective returns down.
Moderate interest rates were associated with a whole range of subsequent returns
over the
following decade, and we know that those
outcomes were 90 % correlated with the level of valuations at the beginning of those periods (on reliable measures such as market cap / GDP, price / revenue, Tobin's Q, the margin - adjusted Shiller P / E, and others we've presented
over time - see Ockham's Razor and the Market Cycle).
Beginning in 1989 and continuing for the next two
decades, researchers
followed over 3,000 participants in a study linking full - fat dairy products with a reduced risk of diabetes and better weight - management
outcomes.8