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Vanguard's Bogle: Fed's Strategy 'Simply Will Not Work'

Friday, June 7, 2013 - 6:39 AM
"There is a tremendous amount of uncertainty out there," Bogle said. "The uncertainty is somewhat higher because the Fed is in control. They are trying to do something, I think in the long run simply will not work."

Vanguard's Bogle: Fed's Strategy 'Simply Will Not Work'
9
ShorebreakShorebreak2,614 posts since
Apr 6, 2010
Rep Points: 14,179
1. Friday, June 7, 2013 - 10:10 AM
""The best wisdom for any retail investor is don't get distracted by all the noise. Stick to your plan. There are no certainties in the world, but it would be amazing to me if over the next 10 years stocks didn't outperform bonds," he said."

Good advice.  The real challenge is what the plan is to stick to over the long term.

Further, I think tactical timing of market still works.  That is, look/smell around, it this a stable market or a volatile market? 

I am certainly not "buying for the long term."  Maybe a little selling into the rally is a good strategy.  I am still at lost why the market is going up after the unemployment report.   
4
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
2. Friday, June 7, 2013 - 10:19 AM
51:  The market seems to feed on rumors and what is going on in politics.  Things can be going on in the background that the average stock buyer is not aware of.  If it is going "up" after the unemployment report, it must be feeding on rumors that make it think things are going to get better in our economy.  This is what makes the stock market so risky imo,.  It can be manipulated by certain investors to help their cause but end up being bad for someone who is not in the "know" about things happening behind the scenes.
3
paoli2paoli21,372 posts since
Aug 10, 2011
Rep Points: 6,011
3. Friday, June 7, 2013 - 10:48 AM
51:  The market seems to feed on rumors and what is going on in politics.  Things can be going on in the background that the average stock buyer is not aware of.  If it is going "up" after the unemployment report, it must be feeding on rumors that make it think things are going to get better in our economy.  This is what makes the stock market so risky imo,.  It can be manipulated by certain investors to help their cause but end up being bad for someone who is not in the "know" about things happening behind the scenes.

I think it went up due to the bad unemployment rate (7.6%) and the market regards it as a good sign that Fed will not stop buying bonds monthly; i.e., bad news is good.

Thoughts?

4
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
4. Friday, June 7, 2013 - 10:57 AM
Paoli2,

Good morning! The market's feeding on rumors and reacting to politics? Sadly, that is nothing new. It tries to be predictive, sometimes it get its predictions right, sometimes wrong . . . much like the weather man on your local news program, right? Or, should I say like Nostradamus? And when people make predictions, their emotions are often just as involved as their reason, drawing conclusions from the "feeling in their gut" as often as from the inferences made from ascertainable data. It is the prevalance of emotion in the market that makes it risky, and the volatility brought by that market risk is what gives certain investors, who are willing to play the risks in the hopes of making high profits, the opportunities for trading on a market that isn't fairly valued. The danger is precisely greatest for those who don't know what they're doing. That is why the average investor, who can't afford to not be in the market (because it's the best way to avoid being prey to "inflation risk"), needs to diversify his or her asset allocation. It's the irrational greed of those individual investors who "backup the truck" buying the latest "hot stock" which causes them to court financial disaster. We may not like it, but that's the way things are in a market economy. Nobody has come up with a better system. Certainly not the socialists!
4
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,285
5. Friday, June 7, 2013 - 11:18 AM
This is exactly what the traders wanted to see today and they are driving the markets straight up...

GOLDILOCKS: This Was The Perfect Jobs Report For The Market

Stocks Charge Higher After Goldilocks Jobs Report Shows 175K Gain - Forbes

Ben Bernanke is smiling like a Cheshire Cat. He doesn't have to do anything but continue his present policy.
5
ShorebreakShorebreak2,614 posts since
Apr 6, 2010
Rep Points: 14,179
6. Friday, June 7, 2013 - 12:25 PM
Whatever direction the stock market goes, there is always the expert interpretation for it.

This is a see-saw market; one step up two steps backward.  Sonds like dance steps I used to know.

Any bet that the market will go down next Monday; or the rally may not even be sustainable today?
2
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
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