These days, every time a Fed member speaks, the financial press and short-term traders parse every single word. The market is trying to rally and come back from the correction of earlier this year, but every time we start to make serious progress, some Fed official insists on stepping in front of a microphone.
Eventually the fog lifts and the world reappears. When it does, there are opportunities for investors. Prudent investing is really simple but extremely difficult, because the best time to buy is when everyone else wants to sell, and the best time to sell is when everyone else wants to buy. That takes discipline.
Our focus determines our reality: what a great life lesson, and it holds true in the markets as well. Currently we are focused on Russia’s invasion of Ukraine, and that has put the market in a foul mood. This situation with Russia is serious and I do not want to suggest otherwise. Having said that, our focus here is financial.
What is the real rate of growth? GDP growth rebounded in the fourth quarter of 2021. After slowing to 2.3 percent in the third quarter, the initial reading for fourth quarter is 6.9 percent. Does that mean we are back to the solid growth of early 2021? It doesn’t feel that way.
After two big up years, the market has begun 2022 on a down note. This is how markets work: two steps forward and one step back. There is plenty to worry about, so what is an investor to do?
