The game plan investors should follow if the Fed hikes interest rates for the last time in May

Sounds like a ” Bold Strategy Cotton” assuming the last hike will be in May.

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Stocks have a mixed performance history following the last interest rate hike of the cycle from the Fed, with the S&P 500 generating an average gain of just 2% one year after the last hike since 1929, according to a note from Ned Davis Research.

But the results are lopsided, with the end of more recent interest rate hiking cycles generating enormous gains over the ensuing six and 12 months. For example, the S&P 500 surged 35% in the year after the Fed's last rate hike in 1995 and 28% in the year after the Fed's last rate hike in 2018.

1. Own large-cap stocks over small cap

2. Pick quality names

   1. Own dividend-payers over non-payers