One Sure Thing When it Comes to Investing (Really)
“Federal Reserve Cuts Interest Rates for Third Time in 2019”
–Headline, The NYT (10/30/19).
Let me see if I’ve got this straight:
If the economy is strong, corporate earnings are growing, unemployment low, etc. . . . the market goes up because the fundamentals are good.
However, if the fundamentals appear to weaken, the Fed steps in, either to lower interest rates — as they just did for a third time this year — or, if that doesn’t do the trick, by undertaking even more aggressive action (see, “Quantitative Easing”).
Then, the market goes up because of the Fed (stock market mavens will recognize this as “the Fed put”).
Bottom line: either way, the stock market goes up.
Sure thing, right?
Maybe, maybe not.
Over a couple decades as an investor, I’ve learned that there’s only one sure thing: “there’s no sure thing” (sorry).