Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
The Breakfast Briefing: U.S. Stocks Open Lower After Fed Says It Sees ‘Further Increased Rates
FYI: U.S. stock futures pointed to a negative open on Friday as investors digested the latest comments from the Federal Reserve.
As of 4:30 a.m. CT, Dow Jones Industrial Average futures were seen down by 90 points, indicating a negative open of -57 points. S&P 500 and Nasdaq futures were also in the red.
The Fed on Thursday decided to leave its benchmark interest rate unchanged, as was expected, but comments by the U.S. central bank suggested it was on course to continue hiking rates. Although a statement released by the institution noted a moderation in business investment, it said the bank still expects “further gradual increases” in the prime lending rate. Traders had been on edge last month due to concerns over the Fed’s rate hiking path.
Several Fed members will deliver speeches throughout the day on Friday. New York Fed President John Williams is holding a speech at 8:30 a.m. ET, Philadelphia Fed President Patrick Harker is making a speech at 8:50 a.m. ET, and Fed Vice Chairman of Supervision Randal Quarles is speaking at 9 a.m. ET. Premium: Jerome Powell Fed Chair confirmation hearing 171128-002 Regards, Ted
Folks, from my perspective, as the FOMC continues its march with its rate increase program I'm thinking this will present greater headwinds for stocks. I'm thinking the 4th quarter of this year is a good time, for me, to start making the transation and move some of my equity money found in the growth areas of my portolio by moving it left into more conserative type securities. Most of the money moved will go into the cash and income areas of my portfolio with a little into the growth & income area. Now that the US 10 yr is yielding about 3.2% and the US 2 yr is yielding about 3% makes it more attractive, to me, for investment. I'm also thinking, in the nearterm, its time for stocks to start tumbling. Perhaps, as early as next year as rates become a little higher and earnings start to soften.
@Old_Skeet: I intend to sell the remainder of investments by year end, and be completely out of the market. Its time to retire my investment life. Regards, Ted
@Ted: Thanks much for all the post you have made here at MFO and FundAlarm. I found a good number of them to be very beneficial. Even though you are going to retire from being active in the markets I hope you will continue to post. Wishing you the very best in the coming years. Cordially, Old_Skeet
@Ted: Interesting that you have made that decision at this point in time. I've been very close to the same decision, and now I'm thinking that I'll follow you on this. The next market cycle is certainly not going to be upwards, and given our ages, we may not be well positioned to ride the next one through to the next bull. Additionally, my wife has no interest in any of this, except of course that she likes being able to maintain our living standard. Given the survival odds, probably better to now transition into a plain vanilla situation to the extent possible.
The futures are already down sharply on the news that both Ted and OJ are planning (or contemplating) selling off some of their mega-holdings.
I underwent a similar thought process a few months back. Rather than vacate risky assets completely I decided to move to a much more conservative “buy and hold” position. Balanced funds now comprise my riskiest segment. I also increased the amount held in cash and added / added to other defensive funds. Quarterly rebalancing only when large deviations from model portfolio occur.
The most important thing was to acknowledge that “buying down” during falling markets might well amount to diving head-first into a deep pit at an advanced age and should no longer be part of the strategy.
Comments
Regards,
Ted
Regards,
Ted
Regards- OJ
I underwent a similar thought process a few months back. Rather than vacate risky assets completely I decided to move to a much more conservative “buy and hold” position. Balanced funds now comprise my riskiest segment. I also increased the amount held in cash and added / added to other defensive funds. Quarterly rebalancing only when large deviations from model portfolio occur.
The most important thing was to acknowledge that “buying down” during falling markets might well amount to diving head-first into a deep pit at an advanced age and should no longer be part of the strategy.