Hello Everyone!
Today at 2:00 the Federal Reserve confirmed that they will continue buying $85 billion in bonds for a few more months, but plan to wind down their purchases to zero by the end of 2014. What does this mean for your money? Two things. First, the bond market may slowly return, as yields rise. However, this could mean that some investors will leave the stock market, causing prices to fall. On the positive side, by having the Fed leave the market, the economy can work towards becoming "normal" again. By normal I mean a market that is not artificially held up. Many investors would argue that every gain since 2009 has been artificial. This will hopefully lead to a more stable market (including bonds) even if we have to deal with short term losses. Be sure to follow me on twitter @andrewciatto
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