Jay Kaplan Comments on the Fed’s Plan to Keep Interest Rates Low in The Wall Street Journal by Royce Funds
“We’ve been in a six-year bull market that’s been driven by free money,” commented Portfolio Manager Jay Kaplan in “U.S. Stocks Jump as Fed Signals Patience,” an article published in The Wall Street Journal following the Federal Reserve’s December 16-17, 2014 meeting.
“The drumbeat of free money becoming a little less free had been a little louder until today,” said Jay. “That gives a little extra bit of happiness today for stocks,” he added.
Jay Kaplan’s comments were in reaction to the Fed’s announcement that it would keep rates low for a “considerable time” and the stock market’s positive response to the news, especially from small-cap stocks (as measured by the Russell 2000 Index), which rose 2.9% to close the day.
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According to The Wall Street Journal article, Wednesday’s incline for U.S. stocks was also partly due to a rally in energy stocks—an area of the small-cap market that we’ve been increasing our exposure to over the past several years—and renewed investor optimism in the sector.
Jay Kaplan has 26 years of investment experience. He is the portfolio manager of Royce Dividend Value Fund and Royce Total Return Fund (with Chuck Royce), Royce Value Fund, and Royce Capital Fund – Small-Cap Portfolio. He also serves as the assistant portfolio manager—along with Lauren Romeo—of Royce Pennsylvania Mutual Fund, Royce’s flagship.