Don’t fight the Fed!

“Don’t fight the Fed! There is perhaps no better advice that someone can give to an investor than to heed these words. Time and time again, investors have learned that it is fruitless to ignore the powerful influence of the Federal Reserve. Yet many investors put little effort into trying to gain a better understanding of this powerful institution. They see the Fed as too complex, secretive, and mysterious to be readily understood. Equity investors seem to be especially intimidated, often choosing to let the bond market tell them what to expect next rather than do the thinking for themselves. But the Fed’s impact on the performance of nearly all financial assets and the money market in particular is so unmistakable that it behooves every investor to learn more. It’s an endeavour that can have great rewards.”

Marcia Stigum, Stigum’s Money Market

 

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