We always talk about the Fed decision the last days when it comes to market. It appears that almost everything seems to be linked to it, doesn't matter what country's marketplaces we're talking about. But why markets feels so much the effect of the worry about something that didn't happened yet? I mean, why markets stop suddenly their activities of (not) speculating or buying assets and suddenly stay on the side to watch what will do the Federal Reverse. I mean, they are doing that since one week at the very least, and I would say rather two weeks. Sometimes we see changes but the trend is here: Fed is in every business article you can find. What's your idea and take on this?
They will raise rates sooner or later. It's just a lousy quarter point - should have been done long ago. In the grand scheme of things, it isn't a big deal - or shouldn't be. The powers that be will do what they will do. I will continue to dollar cost average every week, diversify, look for opportunities to make money (long, short, longterm value / growth investments, the odd quick trade, etc), and keep my eye on the big picture.
Conceptually, the market is a forward-looking mechanism so anything that changes the future (and the value of cash flows) becomes a big deal. In the bigger scheme of things any rate move now isn't going to move the dial, so to speak. But directionally it's basically telling us that the days of very cheap money and the good times rolling are coming to an end. It has to happen at some point. If you weren't able to make the most of the overly accommodating environment, it's a shame because unfortunately it's going to get more difficult going forward.
In my opinion, getting benefits out of a "accommodating environment" and relying on it isn't the same thing. And I believe more and more that markets are relying on it to be afraid like that. I mean, when it's artificially made accommodating, it is pretty obvious that this measure will stop one day and you should try to make your business profitable even if there was not this measure. Airliners do try to make more benefits based on the oil price falling, but they seem already ready to work when the oil price will go up sharply as previously. For example, some tries to renew the planes while the times are more profitable.
