But despite the benefits that our economy and stock market have gotten from the Fed, I’ve got a problem with the “We’re not even thinking about thinking about raising rates (for the next few years)” policy of Fed Chair Jerome H. Powell. Last week’s down days notwithstanding, parts of the stock market are showing signs of excess. ADThese companies compose about 20 percent of the value of the S&P 500, which is a risk that I suspect many S&P index fund owners don’t realize they’re taking. And because this uncertainty puts even more pressure on the Fed to keep rate-induced stimulus flowing, because maximizing employment is part of its mandate. The other thing I know is that if you’ve got serious money (by your standards) in the U.S. stock market, you had better have both financial and psychological staying power.

Source: Washington Post June 30, 2020 09:56 UTC