Fed Question

[katwillny]

With all of the speculative volatility of late, why wouldn't the fed come out and just say when they plan to cut back on QE of watching investors gains erode. Wouldn't that make sense or am I just being a naive novice? The DOW is down over 300 this week on nothing more then speculation and fear.

 

[REWahoo]

With all of the speculative volatility of late, why wouldn't the fed come out and just say when they plan to cut back on QE...

You are making the assumption the fed actually knows when they will turn off the spigot...

 

[katwillny]

actually I am. If they don't know then who knows. Say something for crying out loud, a hint.

 

[pb4uski]

Hadn't they already stated that they would wind QE down once the unemployment rate was ~6.5%?

 

[MichaelB]

actually I am. If they don't know then who knows. Say something for crying out loud, a hint.

They have. Not when, but instead, what. US real and nominal GDP growth and more people employed.

 

[Independent]

The Fed will say they look at lots of numbers and trends and possibilities when they make decisions. Combining them for an exact decision is as much art as science. So they can't predict a date or provide a simple formula.

 

[katwillny]

Hadn't they already stated that they would wind QE down once the unemployment rate was ~6.5%?

I guess someone missed that memo in Wall street. The market has been very erratic over the past few weeks. I guess I have my age (38) and companies with long track records going for me to deal with these ups and downs.

 

[rbmrtn]

I guess someone missed that memo in Wall street. The market has been very erratic over the past few weeks. I guess I have my age (38) and companies with long track records going for me to deal with these ups and downs.

Lot of speculators trying to read to much into each FED speech to get the jump on the other.

 

[eytonxav]

I would think that the Fed taking their foot off of QE accelerator would send a message that the economy has healed and can stand on its own and that would make the market respond favorably, but apparently wall street doesn't share my viewpoint.

 

[katwillny]

I would think that the Fed taking their foot off of QE accelerator would send a message that the economy has healed and can stand on its own and that would make the market respond favorably, but apparently wall street doesn't share my viewpoint.

Agreed. What used to be good news is now bad news, furthermore, whats bad news, is really bad news. Like 207 pts down on the dow.

 

[RAE]

The DOW is down over 300 this week on nothing more then speculation and fear.

You're right, but there's nothing really new about that. The markets always react based on speculation and fear. If that causes you to lose sleep at night, you probably need to scale back your exposure to the market (as I have).

 

[audreyh1]

Hadn't they already stated that they would wind QE down once the unemployment rate was ~6.5%?

And when inflation reaches 2.5%.

 

[audreyh1]

I guess someone missed that memo in Wall street. The market has been very erratic over the past few weeks. I guess I have my age (38) and companies with long track records going for me to deal with these ups and downs.

Speculators on Wall Street are famous for misreading Fed memos. You really can't blame the Fed for this one.

 

[Hamlet]

In truth, I don't think the recent volatility has all that much to do with the Fed. I think it is as simple as-- "the market has been up a lot, and is looking for a reason to pull back a little".

The Fed is just the reason the talking heads find for the decline after the fact.

I think ignoring everything Wall Street does and says would be a good idea for all of our government officials and private company management. Wall Street has the attention span of a 2-year old hopped up on sugar. They shouldn't be given any thought when making decisions that matter over the long term.

 

[Midpack]

It's funny when the market is up double digits for the year no one suggests any actions. But when we have a weekly downturn (not unheard of in summer), someone needs to DO SOMETHING!!!

 

[HFWR]

With all of the speculative volatility of late, why wouldn't the fed come out and just say when they plan to cut back on QE of watching investors gains erode. Wouldn't that make sense or am I just being a naive novice? The DOW is down over 300 this week on nothing more then speculation and fear.

Lot of speculators trying to read to much into each FED speech to get the jump on the other.

Speculators on Wall Street are famous for misreading Fed memos. You really can't blame the Fed for this one.

I would submit that people jumping in and out of the market on "news" of any sort are speculators, not investors. Your local 7-11 owner doesn't buy and sell his store every time the [-]wind blows[/-] market moves, why should other investors?

Every utterance by the FOMC is parsed to death...

 

[katwillny]

It's funny when the market is up double digits for the year no one suggests any actions. But when we have a weekly downturn (not unheard of in summer), someone needs to DO SOMETHING!!!

some of us are very new at this and have questions. Thanks for answering them. Inquisitive minds should always ask those in the know. At least thats what I was told by someone who knows. LOL. thanks again.

 

[haloFIRE]

Katwillny,
Your questions are good, and concerns valid. I do agree with Midpack though. Peaks and valleys happen. Sometimes it helps to look at the market less often....easy to drive yourself nuts; I use to do just that!

All my buys are long term, so I feel good when I see them up....when I see the, down...I tempted to buy more!

You may want to consider dividend producing stocks. When they go up, you will be happy....when down, you will be happy as your dividend yield goes up, and your DRIP earns you more shares.

Keep questioning!