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Time to bump up that 401k
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<blockquote data-quote="Up In Smoke" data-source="post: 5343615" data-attributes="member: 79702"><p>The Fed is doing a lot of good work. It may be 3-4 years too late and 30% too slow, but it's time to quit holding the US economy together with our children's tax dollars. Recessions aren't all bad and short term inflation isn't either. By raising rates, the Fed gives investors large and small another lane in which to plan their financial goals. By raising rates over the S&P average dividend rate, individuals and commercial investors can get back to a balanced investment portfolio. For far to long, low rates forced everyone to go all in regards to the market. I'd be willing to venture most people moved from a 60/30/10 ratio closer to a 80/10/10 one. When investors move large amounts of money from bonds and cash into equities, the result is inflated valuations not increased value. PE ratios ballooned to unsustainable levels. Companies were cash heavy and buying back stock only drove the valuations higher. If the Fed comes out this week and announces a .75 point increase to the short term rate and gives a forward guidance of one or two more hikes, the market will respond to the positive. Valuations have retreated to near historical norms and any news of Treasury Department's satisfaction with there plan of a soft landing, we could see a 4500 S&P by year end.</p></blockquote><p></p>
[QUOTE="Up In Smoke, post: 5343615, member: 79702"] The Fed is doing a lot of good work. It may be 3-4 years too late and 30% too slow, but it's time to quit holding the US economy together with our children's tax dollars. Recessions aren't all bad and short term inflation isn't either. By raising rates, the Fed gives investors large and small another lane in which to plan their financial goals. By raising rates over the S&P average dividend rate, individuals and commercial investors can get back to a balanced investment portfolio. For far to long, low rates forced everyone to go all in regards to the market. I'd be willing to venture most people moved from a 60/30/10 ratio closer to a 80/10/10 one. When investors move large amounts of money from bonds and cash into equities, the result is inflated valuations not increased value. PE ratios ballooned to unsustainable levels. Companies were cash heavy and buying back stock only drove the valuations higher. If the Fed comes out this week and announces a .75 point increase to the short term rate and gives a forward guidance of one or two more hikes, the market will respond to the positive. Valuations have retreated to near historical norms and any news of Treasury Department's satisfaction with there plan of a soft landing, we could see a 4500 S&P by year end. [/QUOTE]
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Time to bump up that 401k
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