AAII Survey: Fed Rate Projections Have Little Impact on Retail Investor Decisions

When the Federal Reserve speaks, the world’s financial institutions listen, and for good reason. Fed policy drives not only global financial markets but also the policies of other central banks. Therefore, any insights into the Fed’s thinking are worth paying attention to. One area that has been getting a lot of attention recently is the…

 

AAII Survey: Readers Predict the Most Impactful Developments in Finance for 2018

Change is a constant in the financial world. New services, products and technologies are always coming to the market. In turn, consumers are confronted with new ways to think about their finances. Some of the trends facing the field of finance this year include: Higher interest rates Tax reform An expanding role of artificial intelligence…

 

It’s Not Just the Fed’s Balance Sheet That’s Changing

Two special notes before I start this week’s commentary. First, L’Shanah Tovah to those of you celebrating Rosh Hashanah. Second, though our Investor Conference is getting close to selling out, there is still time to register. You will want to hurry because late fee pricing will go into effect on Monday, September 25. The event…

 

Readers Split on Benefit of Fed, Interest Rate Hike

After a decade of holding interest rates near zero, the Federal Reserve has raised rates three times in a year. While many would agree that the “free money” environment following the financial crisis of 2007-2009 has fueled the stock market to its long bull run, savers have been seriously hurt by low money market rates….

 

Bulls Retreat During Mixed Week

Weekly Market Summary U.S. stocks struggled to find direction this week, with some of the major indexes moving in a tight range while still eking out new all-time highs. Meanwhile, technology suffered through its worst slump in several months and consumer staples companies were rocked at the end of the week by the surprising news…

 

Market Shrugs Off “New Normal” of Rising Interest Rates

To the surprise of almost no one, the Federal Reserve announced this week that it would raise short-term interest rates and offered greater details of its plans to shrink its $4.5 trillion portfolio of bonds and other assets, which it expects to start later this year. The Fed said it would increase its benchmark federal…

 

Rate Hike Fails to Shake 60% of Surveyed Investors

This week’s Sentiment Survey special question asked AAII members how the FOMC’s raising of interest rates has impacted their market outlook. Approximately 60% of respondents said that the rate hikes are having no or very little impact on their outlook and/or their portfolio decisions. Many of these respondents said that last week’s announcement by the…

 

AAII Sentiment Survey: Neutral Sentiment Rises as Pessimism Pulls Back

Pessimism among individual investors is down for the second consecutive week, according to the latest AAII Sentiment Survey. At the same time, neutral sentiment is now at its highest level since mid-February. Bullish sentiment, expectations that stock prices will rise over the next six months, rose 4.1 percentage points to 35.3%. The historical average is…

 

The Fed-Trump Divergence

To the surprise of almost no one, the Federal Open Market Committee (FOMC) announced that it raised its benchmark interest rate by 25 basis points (0.25%) to the range of 0.75% to 1.0%. This was the third interest rate hike in a decade, but the second since December. This seems to signal that the Federal…

 

Rate Hikes, Inflation and What You Earn

Yesterday’s interest rate hike by the Federal Open Market Committee was the third in a 15-month period. More notably, it was just the third rate hike since the financial crisis. The rate hike represents another step in the (so far) very gradual removal of stimulus. At current levels, rates remain low on a historical basis…