I would beg to differ on your point: "The Fed has been "pumping money" into the stock market for a long time now...".
I don't believe this is true at all. While the Fed has been printing dollars, it has been funnelled into the banking system and into treasuries. I'm of the opinion that very, very little of this money is reaching the stock market. Quite the opposite, in my opinion.
One would think that lower and lower interest rates would create demand in the equities markets but I really don't think this is the case. Money that could be put into the market remains on the sidelines, for the most part. With the exception of retirement funding, 401Ks and the like, I don't think we are seeing people (or many institutions, for that matter) put money into the markets.
I believe many of the major companies in the US are financially sound and are being run very conservatively. They are sitting on their cash, like many individuals.
I for one am moving away from many of the smaller cap names and looking into larger, more stable companies. Companies that have been performing well, even in the face of the tough headwinds of our lousy economy.
Fear has a significant portion of the world caught like a deer in a car's headlights. These manic swings we are seeing on nearly a daily basis in the world markets is doing little to calm this fear. Add the inability of our politicians (on both sides of the aisle) to have even the slightest bit of understanding how their divisive vitriol has poisoned not only their constituents but the rest of the world's view of American politics. When compromise is considered an evil in Washington, why should anyone expect the markets to remain calm??
The above comments are not intended to turn the conversation towards politics, quite the opposite. They are referenced by me because they are a direct force enhancing the basic underlying fear of investing in stocks.
jmo
TO |
