Moves to Make Before the Next FOMC Meeting
Don’t get caught in the middle, and don’t have any illusions about the Fed’s actions. The data is almost entirely negative, and with more than $202 trillion in unfunded liabilities that Washington lacks the willpower to address, anything the Fed does will be an exercise in the law of diminishing returns and unintended consequences.
Your best choices right now are to remain with those investments the government cannot abrogate or duplicate:
- When it comes to stocks, stick to the “glocals.” These are large multinational firms with diversified cash flows, fortress-like balance sheets and globally recognized brands.
- Buy up resources, energy and other commodities that will hold their value as the dollar declines. The most obvious play here is the SPDR Gold Trust (NYSE:GLD). I am hesitant to chase anything that has gone up so rapidly, so pull backs may be your best bet at this stage of the game.
- And use inverse funds, such as the Rydex Inverse S&P 500 Fund (MUTF:RYURX), to hedge your downside and your income. The volatility that has recently entered the picture is likely to be our travelling companion for the foreseeable future.