Well, the truth is, my head is still spinning.
Of course Bernanke must be a smart guy, and I have to acknowledge that too much was already in play at the beginning of his term. Watching Maria Bartiromo interview Greenspan and I was floored at his lack of awareness regarding the quantity and quality of the subprime mortgages there were out there. So I think Ben came in to this as an accident waiting to happen.
Given that it takes X months for a rate drop to have any impact on the economy (economy, not the market) we will likely still have a bagel, but as the cheap money once again floods the market, it may be short lived. As far as the 3/4% drop, I think that was a sign of weakness and panic, and the market reflected that.
In a few years this should be seen as any other dip, a buying opportunity. And the next cycle up is where I shift allocation to the mix I’d have at retirement, as I’m looking 5-7 years out.
Enjoy the weekend,
JOE
Jan 25
