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Strategist Sees 'Ho-Hum' Returns For Next 7 Years

Shorebreak   |     |   4,118 posts since 2010

What is the long-term effect of the Federal Reserve keeping interest rates low?

[Fed chairman Ben] Bernanke is making sure that we don't get a decent risk-free return. It's brutally unfair to retirees. He's doing this because if he keeps rates ugly enough for long enough, we will reluctantly filter our money into equities. A higher stock market induces more consumption and is helpful short term to the economy.

The bad news is every penny of that gets given back. It's like a pact with the devil: You make your money by pushing stocks up, but then inevitably the market must go back to fair value. When it does, it creates an anti-wealth effect, usually at the worst possible time.

Top investment strategist weighs in on today's market - Jun. 27, 2012

paoli2   |     |   2,409 posts since 2011
After spending umteen years protecting and saving money, do they really think in our senior years when we can't afford to make it back, we are going to be stupid enough to put it in stocks!!  What we need to do is put out energy towards replacing Bernanke and letting Washington know we have had enough of their financial antics:


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