Introduction This week’s edition of the Evergreen Virtual Advisor (EVA) is a return to one of our most popular formats, the Evergreen Exchange. This structure gives three members of our investment team the chance to agree, disagree, or simply comment on a topic of interest. The theme of this issue revolves around common misconceptions in the market.

Fed Storm Rising. It’s been roughly 13 years since I borrowed—and modified—that title from Tom Clancy for our old hardcopy client newsletter, The Strategist. It was written during the early stages of the last Fed tightening cycle, a hiking campaign which was to last for two years, jacking up its overnight rate from the previously-unimaginable level of 1% to a peak of 5 1/4% in June, 2006.

Despite the fact the Fed increased rates at 17 consecutive meetings from 2004 to 2006, the S&P 500 rose pretty much steadily throughout this period. Stocks even made a slightly higher high in October of 2007, in the wake of the Fed’s somewhat panicky 50 basis points (1/2%) cut, in September of that year, due to the escalating crisis in the housing market. On the day this sharp rate reduction occurred, the Dow spiked 2.5% while the S&P 500 vaulted an even larger 3%. Investors were clearly remembering the old Wall Street maxim that you don’t fight the Fed.

Time for a surreality check. Somehow, I don’t think I’m alone in waking up on certain mornings wondering into what parallel universe I’ve been transported. The daily surreality show I’m referring to includes, but is not limited to, watching what are decidedly unpresidential press conferences by our new president—not to mention an endless stream (of consciousness) tweets—and shockingly public feuds with the US intelligence community. These recurring events have caused global uncertainty surveys to go postal.