Volatility is an Opportunity for the long term investor to accumulate shares: Market Update 12/4
Published at : 30 Dec 2021
This is Bob Payne, Chief Investment Strategist at Payne Capital Management with this week's Market Update. This week on the Street of Dreams volatility spiked on fear of the newly identified Omicron variant and the announcement by the Federal Reserve Chairman Jerome Powell that the Federal Reserve might end its pandemic era stimulus sooner than expected. But now that we have vaccines and therapeutics to deal with Covid and its variants, I have to believe that the reaction this week is more about the realization that monetary policy both here and abroad is about to change.
Now, our Fed Chairman Jerome Powell has finally acknowledged that inflation is rising and will no longer use the word transitory when referencing inflation. And that's led many to believe that the Fed will raise interest rates as early as April versus the expected mid-summer timetable.
Meanwhile, he acknowledged the economy is continuing to strengthen and unemployment at 4.2% is falling faster than anyone at The Fed anticipated. All in all, economic news continues to be positive. Now with that being said short-term volatility in the financial markets is not a call to action. It doesn't announce its arrival or its departure and it has no predictive power and is impossible to time. What it does provide is an opportunity for long-term investors to accumulate shares at discounted prices.
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