What should investors do in these wildly fluctuating markets? Wait it out, according to Schwab Chief Investment Officer Liz Ann Sonders. She believes that rumors of the demise of the global economy are greatly exaggerated and that investment opportunities continue to develop. She offers advice on how to proceed in this recent Market Perspective. Now that we’re approaching the time frame originally slated for an interest rate hike from the Federal Reserve, speculation about the event is rising. However, with both the World Bank and the International Monetary Fund advising the Fed not to raise rates, Jeffrey Gundlach doesn’t think it will happen soon. He discusses the present economic factors that may prevent the Federal Reserve from acting, at least in the near future.
Don’t Just Do Something, Sit There!– It can be difficult to stomach market moves such as we’ve seen recently. But investors who have an investment strategy in place should indeed just sit there, let things calm down, and continue with the plan already put in place. There is no recession in sight. Sustained bear markets have typically not occurred outside of close proximity to an economic recession—and data isn’t showing a strong likelihood of that in the near future. Liz Ann Sonders, Chief Investment Officer at Schwab, and her team explain in this article. Read more…
Which Central Banks Are Hiking Rates And What Does It Mean For Markets?– From 2009 to 2011 central banks including those in the Eurozone, Brazil, Australia, Sweden, Norway, and Israel increased interest rates after the financial crisis had ended. While most stock markets in those countries welcomed those rate hikes with gains, every one of those central banks had to turn around and cut interest rates again because they had acted too soon and the pace proved to be too rapid. Stock markets in those countries declined as the central banks were forced to reverse course. The U.S. Federal Reserve and other central banks have signaled a slow and steady pace of rate hikes over the coming year, but global stock markets remain skittish as investors await clearer evidence of the pace to emerge. Jeffrey Kleintop from Schwab explains in this article. Read more…
What The Fed Should – And Will – Do– Jeffrey Gundlach, founder of DoubleLine Capital says, “I don’t think the Fed will be able to raise interest rates this month, and I don’t really think they’re going to raise them this year. And if they do, I think it will be a real problem.” This is because economic weakness, market vulnerabilities and a lack of inflation argue against an increase in interest rates. Gundlach cited numerous examples of each in a conference call last week. Read more…