The Fed announcement of QE3 was the big news last week. Despite my misgivings and distaste for more easing, it’s here, it’s going to happen, so let’s make some money from it. Or more importantly, not lose any.
The good news is we have history on our side. A little research will show us what happened with the last two QE events. Though I don’t see it having nearly the same effect this time around. There is too much uncertainty going into the end of the year.
The Announcement
The Fed, for the first time, announced an open-ended easing program entirely based on improving the unemployment rate.
The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. – Federal Reserve FOMC Statement Continue Reading…
If you had the choice between paying full price, over paying or getting a discount, which you would choose? A sane person would take the discount. The shopping habit of actively searching for deals, bargain hunting is the basic idea behind a value investing strategy. Seriously, who doesn’t like a discount?
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