Wednesday, June 24, 2009
All eyes on the Fed
Today the Federal Reserve will conclude it's regular two day meeting with an announcement on their position on short term interest rates. It is expected by almost all pundits that they will not change rates from where they are now (a 0-0.25% range). Of greater interest to traders will be their policy statement on where they see the economy going in the near to mid future. There is now considerable debate between economists as to whether the US economy is heading out of the current recession and if we are possibly entering a period of higher inflation. Some suggest that the greater short term fear is deflation, not inflation. So what does it all mean for the average investor? Well, if you are an investor, what the Fed does or says today means nothing. Investors are in the market for the long haul. If you are a short term trader, then what they say could have some bearing on if you should buy or sell today. Figure out if you are a trader or an investor and act accordingly. Build your portfolio to withstand market volatility and capitalize on market corrections. It's ok to hold cash for the short term, but everyone needs a portion of their assets in the market based on their risk level, goals, and objectives. If you were out of the market these past 3 months, you missed out on a 40% gain from the lows in March! CD's cannot dig you out of the hole you are in from last year's crash. Go Ben, Go!