Posted by kdadmin on May 23rd, 2013.
As you’ve probably heard, the Fed chairman essentially made a comment that the economic stimulus (via bond purchases) could slow “in the next few meetings.” The market didn’t like that one bit… It was down even further in after hours and pre-market trading. The volatility index is up nearly 10% since yesterday.
I ask you this: Didn’t we all know that QE had to end at some point? I mean, how long could we just keep printing money to “solve” our economic problems?
Luckily, I’ve been managing your portfolio in a more defensive manner for just this reason. I’ve kept a much higher amount in bonds than normal due to concerns about when the QE would end. Assuming you’ve been following my recommendations in your portfolios, your returns have still been very strong; and thanks to your nice bond overweight, you didn’t get trampled as everyone ran for the exits yesterday.
Happy Memorial Day!