A week ago Monday a dovish Ben Bernanke inspired a buying spree that pushed the Dow some 160 points higher… Released yesterday; the minutes from the FOMC’s last get together – suggesting Bernanke’s cohorts don’t necessarily share their fearful leader’s sentiment – inspired an immediate 90 point sell off…
Of course we all want the market higher, but this is clearly one of those careful-what-you-ask-for moments… And one of those moments where we separate traders from investors… Traders are forever after the quick hit, and, for them, there’s nothing better than the printing of money… Investors, on the other hand, are looking for sustainability…
Being an investor (and one who counsels investors), in terms of the recent “Fed” news, I’m liking the latter; the idea that they don’t see a strong need for round number three of asset purchases… If they stick to those guns, bonds will suffer (they’re over-due), but the impetus (a strengthening economy) should be bullish for stocks… After the dust settles that is….
Stay tuned….