Written by Keith Springer 12.20.13
“The Grinch will not steal Christmas,” Bernanke cried, “To prevent such an unthinkable thing, I will keep the fiscal stimulus flowing; Although I may taper, our purchases are not done; And interest rates will stay at zero for years to come!”
I hope you don’t mind that I have taken more than a little poetic license with his words, but the message is clear. As he put it:
“Highly accommodative money monetary policy remains appropriate. This will remain the case until unemployment falls well below 6.5% and inflation returns to 2%. The Fed balance sheet will continue to expand.”
Is this creating yet another bubble? You betcha! That is all the Fed can do in this demographic downdraft where our population is aging, turning spenders into savers, just as I have examined in depth in Facing Goliath – How to Triumph in the Dangerous Market Ahead.
However, this will certainly help stocks in the short term. We are coming off one of the worst year for bonds in memory, and only the 3rd time in 4 decades that bonds have lost money. We think that trend will continue and investors should focus on equities, albeit cautiously. This does step up the risk level but given the environment, it appears warranted.
Don’t let emotion get in the way of investing. The pro’s don’t, and that’s why they do so well. You may feel like it is time for the next show to drop on the economy, but remember one thing, the market can stay irrational longer than you can stay solvent! In difficult markets like this, it is ever so important to be the expert or hire one. I can honestly say that in my 29 years of managing money professionally, I have never seen a more difficult time.
As an investor who needs their money to properly work them in order to retire comfortably and on time, you cannot just sit in cash waiting for the next crash or even an entry point. Money is the bank is simply losing money safely. You can’t throw caution to the wind either. Having the right plan is the most important thing of all. The key is to be properly invested so you are getting the very best returns necessary, but with the least risk possible. The Springer Investment Approach is designed to do just that by managing risk and delivering returns, in any market.
…… and that’s where we can help. To learn more about our powerful proprietary Investment Management Strategy and/or get a free second opinion on your portfolio, simply reply to this email, or give me a call for a no-cost no-obligation consultation today at (916) 925-8900.