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Sunday, February 09, 2014
Apparently, research informs us that 100% of the market's gains since 2009 came when the Fed has decided to buy bonds (also referred to as quantitative easing). And it turns out that in the few periods where they were not printing money, the markets went down.
Basically what's happening is the economy cannot support market prices. The only thing that can is consistently printing money and flooding the economy with cash. As soon as the Government stops doing that, the markets will fall down to a value that is more realistic based on what the economy is doing.
What does this mean for you? This means you ought to pay very close attention to what the Fed is doing and when they plan on "tapering" off their easing. As soon as the tapering begins, you need to look out for a rapid falling market.
Of course, the market may decide that it will not wait for the Fed to taper. It might want to nose dive anyway.
This brings up the same question I ask you regularly. Are you wishing for the best, but getting yourself ready for the worst? Or, like most individuals, are you hoping for the best, and preparing for the best?
Now is a great time to review your planning to make sure that you don't get caught without warning when the markets take a dive. Why not call our office to get a 2nd opinion? It's free, and it may turn out to be well worth your time. 916-509-7227 (Pacific time)
Author is Matt Golab, who is the Chief Advisor of Aaron Matthews Financial Resources.
Matt is an authority on creating innovative tax and investment solutions to help his clients succeed in their retirement years. The strategies Matt Golab has established and passed on through successful financial planning with hundreds of clients over the years. Golab is often asked by national websites that focus on the education of consumers to present his knowledge on the areas of retirement and retirement income plans. Matt Golab continues to expand the geographic reach of his audience and desires to bring his expertise to a nationwide television audience. Matt emphatically states his mission, "I want to change the way Americans view their retirement. They can succeed (stay retired) regardless of what happens in the market". If you would like contact details for Matt Golab, please click here. Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Advisor.