At long last, the market finally got their long awaited Federal Reserve rate increase. Yesterday, the Fed hiked the Fed Funds rate by 25 basis points, from 0.25% to 0.5%. The Fed's famously watched "dot plot" revealed that most members expect at least four rate hikes in 2016. And investors? If interest rate swaps are any indication, then investors expect no more than two rate hikes next year.
So who is right then? The Fed? Or the market? Continue reading "Fed At Odds With Markets Over Oil"
Before I dive into yesterday's rate increase, I just want to ask you, are you enjoying the 12 Days of Trading Tips? It's always a good thing to refresh your mind and energize yourself by reviewing some of the fundamentals of trading. I think today's trading tip on market timing is one everyone should read as it underscores the old market saying, "Bulls make money, bears make money and pigs get slaughtered."
Yesterday Janet Yellen, Federal Reserve Chairman, finally gave her long-awaited blessing to raise interest rates. It's perhaps the most anticipated rate hike in history and the first jump in almost a decade. I believe that the Fed should have acted months ago and they are still trying to figure out how to clean up the mess they created. Continue reading "Will Santa Be Happy With Yesterday's Rate Increase?"
Don't try to buy the bottom or sell the top. It's incredibly hard to time the market.
How many times have you sold at what you thought was the top only to see the market head higher? And conversely, bought at what you thought was the bottom only to see the market erode further? Instead, focus on hitting that middle 80% of the trade.
It's OK to give up a little bit at the beginning and end of the trade to make a profit.
After all, a profit is a profit.
Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
Think percentages vs. number of shares.
As you build your portfolio of stocks, concentrate on the percentage of your overall portfolio you want to invest and don't focus on the number of shares.
For example, one of the biggest mistakes novice investors make is buying 50, 75 or 100 shares of a stock. Instead, take your overall portfolio value and divide it evenly into percentages and then purchase your investments according to this plan.
Remember tip #5? It's easier to diversify using percentages.
Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
For the investors who are watching the Euro, its latest behavior might appear bewildering. After all, the ECB, slightly undershooting expectations, still increased its target asset purchases to roughly €1.5tn. At the same time, the ECB cut the deposit rate to -0.3%. And let's not forget the goings on over on the other side of the Atlantic. There, the Federal Reserve is gearing towards its first rate hike in almost a decade. What, then, could possibly incentivize investors to buy Euros? And can it last?
When investors expect more central bank easing, they also expect the obligatory rhetoric. But what they hate is when the rhetoric is of a very specific sort. In this case, it is when a central banker stresses the limitations of monetary stimulus. Yet, in practically the same breath, they drive home the need for more government input. And essentially, that is exactly what Mario Draghi said.
Now, when the Fed unleashed similar rhetoric, it was seen as a signal that its ammunition might be running out. Earlier this year, the BoJ had made a similar statement in an attempt to lower expectations of more stimulus. Continue reading "Why The Euro Is Rising And Why It Can't Last"
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