Such a turn of events isn't so hard to imagine. Never underestimate people's capacity to find new causes for gloom when the markets aren't doing well.

But for long-term investors with the requisite patience, history still offers encouragement to the bulls. "It's unwise to fight the Fed," say analysts at Charles Schwab & Co. in a study published on the firm's Web site at www.schwab.com. "There is no perfect predictor of economic or market cycles, but a remarkably reliable one has been interest rates."

Since 1970, Schwab says, the Standard & Poor's 500 Index has averaged a 19 percent gain in years when the federal funds rate dropped, compared with a 9 percent rise in years when the rate rose.

By Schwab's reckoning, the one year in the last 31 during which rates fell and stocks declined anyway was 1990, when the S & P; 500 dropped 3.2 percent. The next year, 1991, with rates still coming down, the index made up for lost time with a gain of 31 percent.

Will events unfold in precisely the same way now? Of course not. Neither the Fed nor anybody else can conjure up a stock market recovery on demand. But patient stock-market investors have a much better shot at benefiting from the Fed's interest-rate cuts than do those who insist on getting their money right away.

Chet Currier is a columnist for Bloomberg News.

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