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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (111580)	3/26/2012 12:02:45 PM
From: RetiredNow	Read Replies (1) \| Respond to of 149317

Well, one person you have solidly in your corner is Bernanke. He is almost solely responsible for the ramp in the stock market. All he had to do today was say he doesn't think the recovery and unemployment rate improvements were sustainable and that further accommodation for the long term was required, and the stock market responded in kind. This is what worries me more than anything. Bernanke has created an atmosphere of dependency. The stock market is no longer a mechanism for price discovery based on fundamentals and supply and demand for capital. Rather, it has become a speculative vehicle for betting what the next move will be by Bernanke. It's no accident that risk asset correlation is higher than at any time in the last 30 years. The markets move up and down based on what Bernanke said most recently. It's becoming a joke. Individuals have fled the stock market as a result. Now, mostly what is left is large institutional investors, hedge funds, and high frequency trading computers. Anyway, I make investments, not on my personal forecasts of up or down, but rather based on three key things: 1) Fundamentals of the investment. 2) Income to be derived from the investment. 3) Risks, both macro and micro. Right now, item # 3 is telling me the risks are so large that it doesn't matter what # 1 & 2 tell me. That means, when I risk adjust any investment, I have to mark them down dramatically before I'll buy. I do have a few stocks, but they represent less than 15% of my portfolio now. That's what I think is appropriate for the risks right now, given my time horizon to retirement and the macro situation out there.