Lots. Don't think that Dr. Ben Bernanke and the Federal Reserve can only raise and lower the interest rate to have an effect on this economy and on the financial markets. There is buying and selling of securities on the open market, loaning money to banks to raise capital, working closely with the central banks of other countries to manage their foreign currency reserves and his two new inventions: (1) the Term Auction Facility and (2) as reported by the Wall Street Journal (July 9, 2008) "...the unprecedented role in lending to the nation's largest investment banks...". These are all useful techniques.
After just finishing Dr. Bernanke's book compiled in 2000 on nine different essays he prepared with others over the past 20 years on the causes of the Great Depression, I am convinced that the Fed will continue do what is necessary to increase money supply and get the financial markets to operate more smoothly. We are not even close to the high unemployment rates of that difficult period in our history.
There are ramifications to these current Fed actions down the road but those can also be dealt with in a manner that the Federal Reserve can successfully manage. No one said it would be easy or without its bumps along the road but the Federal Reserve has a lot of items in their tool box these days.
If your asset allocation and time horizon have been appropriately determined then getting out of your stock allocations in hopes of re-entering at a later date is not a wise strategy. Missing only 10 "up" trading days in the past 10 years - or about 2,000 or so open market days - would reduce a portfolio return significantly. No one knows when those good days will occur.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.