This attention to attitude-measured-by-surveys is not helping the market. Attitude changes far more rapidly and more extremely than reality. There are a lot of real issues out there, primarily inflation. But, the biggest issue in the market right now is the fixation on mood.
In our last Insight I predicted that after the Fed’s rate hike we would see the market sell off and then rally. We got that part right, but now what? Is this the final lasting rally or just another short-lived bump?
The Fed raised rates by 0.75 percent and the market celebrated…before it sold off. I believe we have seen this movie before. Is the market being overly pessimistic?
It isn’t really inflation that scares the market, it is the Fed’s reaction to inflation that scares the market. Market participants fear that the Fed will put us into a recession in their effort to get inflation under control.
How should one judge the quality of an active mutual fund manager? The obvious answer is to look at the results – how has the fund performed? It seems like a simple question, but the answer is not so simple. There are countless ways to measure investment results. What is real and what isn’t?
