When does this train stop, or even slow down? While many have been amazed at the stamina and breathtaking rise of markets there are many who continue to sit on the side lamenting the worries of others. Some ‘curse’ the market performance, scornful and full of envy. “You’ll get what you deserve, and very soon.” In the meantime, new highs are logged day after day.
THE TREND IS YOUR FRIEND
For now, it just pays to ‘go with the flow’, and right now that is equities. Stocks are strong and gaining momentum.
BUYERS SEEN ON DIPS
There has been a persistent bid in equity markets and debt. What is this? Simply stated, money is being put to work at every opportunity and with little fear of losing. Naturally, this confident behavior has been shaped by none other than the Fed and Ben Bernanke – who has tried in earnest to get investors into risk assets.
DON’T FIGHT THE FED
Bonds have been strong for years, no question the big buyer has been that persistent bid (the Fed). If you wanted to ‘piggyback’ on the Fed and buy bonds along with them, that was the easy trade, certainly if you thought QE was going to last longer than most predicted.
Betting against the Fed is just not good for your wealth. How this all ends is going to be interesting but I can tell you this much – being in front of the train whichever way it ends won’t be where I will be!
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