1 Stock-Split Growth Stock to Buy Now and Hold Forever

The Federal Reserve began raising its benchmark interest rate in March 2022. Policymakers pushed that rate higher at its fastest pace since the early 1980s in an effort to bring inflation back to its 2% target. They have nearly hit that mark. The inflation reading was 3.1% in November 2023, a significant slowdown from 9.1% in June 2022.

Given that progress, the Fed held rates steady at the last three meetings, and officials have signaled an end to the rate hike cycle this year. In fact, the latest projections imply a few rate cuts in 2024. In any case, the end of a rate hike cycle has historically been a good thing for the S&P 500 (SNPINDEX: ^GSPC), a benchmark for the broader U.S. stock market.

Here’s what investors should know.

History says the stock market is headed higher

The Federal Reserve has guided the economy through 10 complete rate hike cycles in the last 50 years. The S&P 500 moved higher 80% of the time during the 12-month period following the last hike in those cycles, and the index returned a median of 16.1% during those periods.

For context, policymakers last raised the benchmark rate on July 27, since which time the S&P 500 has advanced 3.7%. That leaves an implied upside of roughly 12% through July 2024, provided the index performs in line with its historical average.

As a caveat, past returns are never a guarantee of future results. Each rate hike cycle during the last 50 years was caused by different circumstances, so the current one could play out very differently. However, the S&P 500 has returned about 10% annually over the long term, so now is a good time to buy stocks no matter what happens in the next 12 months.

Investors can find inspiration in recent stock splits

Investors looking for places to put their money should consider the many popular companies that have split their stocks somewhat recently, as detailed below:

• Amazon: 20-for-1 split in June 2022.

• Apple: 4-for-1 split in August 2020.

• Arista Networks: 4-for-1…