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Old 09-18-2013, 04:31 PM   #21
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Interestingly, emerging bonds bottomed in June, and diverged from treasuries until today.

Ha
I imagine that is because treasuries gapped up along with everything else as the hedge players and shorts reacted to today's surprise. Will be interesting if that changes after the immediate sphincter tightening is over with.
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Old 09-18-2013, 04:34 PM   #22
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"Just think of all the cap gains tax we'll rake in! Deficit? What deficit?"
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Old 09-18-2013, 05:01 PM   #23
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I had sold some individual stocks earlier this week planning to convert to index funds. Of course I put in a buy order for $90,000 of Vanguard funds this morning when things were down, but instead the market did a 180. I really should convert the Vanguard funds to ETFs so I don't have to get the end of day pricing.
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Old 09-18-2013, 05:31 PM   #24
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I understand the impact of the Fed's actions driving interest rates lower, but it always strikes me as somewhat schizoid that when something like this happens, it's the markets saying "Woohoo! Things really aren't as good as we thought they were...so let's go out and buy some more stocks!!!!"
I agree with this 100%. I'd also add: the market is overjoyed about a policy that increases inflation?! Ridiculous.
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Old 09-18-2013, 05:53 PM   #25
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I agree with this 100%. I'd also add: the market is overjoyed about a policy that increases inflation?! Ridiculous.
I don't see it so much as being overjoyed with equities, but rather fear of Easy Money chases funds out of bonds and cash and into stocks. "Don't fight the Fed."
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Old 09-18-2013, 05:54 PM   #26
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I agree with this 100%. I'd also add: the market is overjoyed about a policy that increases inflation?! Ridiculous.
Markets are looking no further than "money makes the mare go". Most times, it makes no difference what the ultimate or downstream effects of some policy are, if it increases liquidity investors are happy. Many of them plan to be long gone before the price comes due.

Ha
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Old 09-18-2013, 05:57 PM   #27
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I don't see it so much as being overjoyed with equities, but rather fear of Easy Money chases funds out of bonds and cash and into stocks. "Don't fight the Fed."
Hardly any sign of money being chased out of bonds today- they mostly boomed.

Ha
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Old 09-18-2013, 05:58 PM   #28
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So I wonder, is the economy really not doing well enough... or have they opened Pandora's box and have no idea how to close it.

Anyway, looking at my account balances today makes me go WHHHHHHEEEEEEE!!!!
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Old 09-18-2013, 06:06 PM   #29
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Everything was up in my portfolio. First time in a long time. I think Mr. B is just giving folks a little extra time to move things to a safer place.
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Old 09-18-2013, 06:30 PM   #30
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I was surprised. I stated previously that they were going to let intersect rates slip up to 3.5 or 4 by next year. Looks like my crystal ball needs some work.
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Old 09-18-2013, 07:21 PM   #31
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When I first heard the news I thought this decision must have been made with Yellen's input. Later Bill Gross came out with this:

Pimco's Gross: failure to taper marks Bernanke handoff to Yellen - The Tell - MarketWatch

Great minds think alike and are probably both wrong.
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Old 09-18-2013, 08:25 PM   #32
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Everything was up in my portfolio. First time in a long time. I think Mr. B is just giving folks a little extra time to move things to a safer place.
Mine, too! What fun for all of us to check on how our investments are doing, today. I know, I know, it's the "Wheee!!!" girl at it again. I'll stop now.

I have absolutely no idea of what Mr. B is up to, or why. Or what's next. Or anything about it. I do know that this first few years of retirement have been absolutely phenomenal for 2009 retirees like me. This will put us in a much better position for the next crash (whenever that may be).
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Old 09-19-2013, 07:16 AM   #33
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In the better lucky than good dept. Realty Income O dipped under 40 which got me interested, so put in a order at $39.25 yesterday. Woke up saw the market was up and O was back over 40. Imagine my surprise when I got the trade execution that said that I bought more O stock. I then checked and I managed to get the low trade of the day. I generally make about 4 trades a month, but yesterday I made 4 in one day and 3 out 4 were almost perfectly time near the lows before they reversed course after the announcement.

All this while being asleep during almost all trading hours and pretty much oblivious to the Feds announcement was going to be made yesterday.

Look for my new book. Day Trading while Sleeping
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Old 09-19-2013, 07:21 AM   #34
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I have absolutely no idea of what Mr. B is up to, or why. Or what's next. Or anything about it. I do know that this first few years of retirement have been absolutely phenomenal for 2009 retirees like me. This will put us in a much better position for the next crash (whenever that may be).
I don't think the Fed has had a clue about what they are doing for quite awhile. They started QE to supposedly increase economic activity. Japan has been doing that for over a decade and it hasn't helped them at all. Our economic activity is still the weakest of any post-WWII recovery and they were all accomplished without QE. What's been different between us and Japan is that we've had a big stock market boom but we also had a panic collapse that was over done. Valuations (IMHO) are higher but are not into bubble mode. The valuations are also not fully incorporating the rock bottom interest rates. People don't expect them to last.

Next "crash" -- I expect a significant drop in 2014. I would expect 20-25% which isn't anything new to Mr. Market. I'll ride my index funds through it just like I did the 2008/2009 swan dive.
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Old 09-19-2013, 07:46 AM   #35
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I don't see a 20% drop happening while interest rates are less than 3% on a 10 year bond. Stocks don't even have to pay much of a dividend to be more attractive over a 10 year or 20 year period than a 3% fixed rate.

I think we may get a few 5% dips like we did in the past couple of years.
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