The Federal Bank Reserve has announce today at 2pm that the well expecter Tapering will commenced.
The Fed announce that The Federal Reserve will reduce its purchases of Treasurys and mortgage-backed securities later this month to not let the economy overheat and hyperinflation to take place.
The goals of the commitee through this QE has been achieved, which is to reach max employment and continued gains in the economic activity. In livht of the inflation rate, the feds will proceed to Taper by reducing is net asset purchase by $10 Billion for Treasury securities and $5Billion for mortgage backed securities. Target rate of federal funds rate will be at 0 to 1/4. The feds want the inflation rate to be below 2% on the long run.
Now, what does this mean for the $S&P 500(.SPX)$ market overall?
1. The market will no longer have big gains and movements, and the market will slowly make a correction as there is no more market manipulation by the Feds.
2. The stock will go back to its intrinsic value based on its fundamentals.
3. Value-play will emerge. And value stock will do very well in this period of time.
However, keep in mind, the S&P500 has never failed anyone since 1957. The market has always been bullish and will continue to be bullish.
So what should u do now?
Buy the S&P500 or any value stocks to profit in this market! I suggest $Berkshire Hathaway(BRK.B)$and $Vanguard S&P 500 ETF(VOO)$
Happy investing!
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