What is quantitative easing, and why does it matter? Will a Fed interest rate hike derail global growth prospects? How will the stock market respond to lower inflation? Will investors panic and induce a global asset selloff? These are the questions that keep Janet Yellen, America's most powerful woman, awake at night.
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The Great Greek Failure
I’m sure by now you’re equally annoyed with triple-digit market downturns in both America and Europe, all the direct result of Greece’s selfish financial ministers and incompetent governing body; however, good news, for the collective West, has finally emerged from the childish pit of gloom and doom formerly known as Greece: European leaders have withdrawn from negotiations with Alex Tsipras’ socialist representatives.
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Stocks To Move Even Higher
Although the stock market is shattering records, and publically traded companies are more valuable than ever, much of Wall Street fears an upcoming “market correction." The general consensus is that September 2015 will mark the end of the Fed’s Quantitative Easing program, and the beginning of interest rate hikes (also known as the Federal Funds Rate). In response, investors are hesitant to invest capital in the stock market.
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The Fed's "Easy Money" Policy
Over the last several years, there has been a growing discrepancy between America's booming stock market and its sluggish macroeconomic growth. Even as GDP inches upward and the unemployment rate "declines" — due to a substantial drop in labor participation — the bull market has charged forward.
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Recognizing Reality
Recently there has been what some investors believe are “corrections” to major stock markets. However, the reality is that these major corrections may instead be extreme turning points – the result of major economies, like America, trading long-term growth for short-term stability.
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The Golden Hoax
The value of gold has taken a tremendous hit over the past few months and has had an extremely tumultuous 2013. This precious metal, touted as a hedge against market instability, has proven extremely volatile since 2011. Yet, gold remains at the forefront of news with many critics and supporters. Given the mixed signals investors receive from analysts, what are we to conclude about the value of gold? How are we to determine its worth?
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