FOMC sept meeting and Markets

[cashrich]

Hello Guys,

I have read this week that the FED/FOMC in its Sept meeting may take following decisions based on weak economy:
1) QE3 or
2) Extend low interest rates in future or
3) both above options

my question is what should be done in order to make good use of this information?
1) should we Invest in Stock market
2) should we Invest in Bond market

Also historically -
what have been the outcomes in recent past when QE1 and QE2 were announced?
what have been the outcomes in recent past when Lower Rates were extended?

You may think i am trying to time the market, which may be a valid assumption, at the same time I am trying to be educated with my upcoming Roth and other investments.

So thanks for your opinion and words of wisdom.

[disneysteve]

I think you should have an asset allocation for your portfolio that meets your goals, your timeline and your risk tolerance. Then you should stick with that allocation, investing regularly and consistently over time, adjusting and rebalancing as needed to get back in line with your desired allocation.

Then, I think you should turn off CNBC and watch SpongeBob or some equally entertaining show.

[cashrich]

Steve,

Thanks for your quick reply. Firstly the info i mentioned was from reading a major AMC report and not CNBC
The info i am looking for is historical data and actions that maybe needed on my part for lets say DCA.
My AAP is in place, this may help me to rebalance.
So if you know any info on those questions please post a reply.

Thank You!!!

[disneysteve]

How old are you? The reason I ask is because if you are nearing retirement age, or already retired, short-term concerns may be worth paying attention to. If you are relatively young and still have at least a couple of decades remaining to your working years, what the FOMC does or doesn't do in September isn't nearly as important.

My AAP is in place, this may help me to rebalance.

If your asset allocation plan is in place, why would anyone's predictions about the short-term future of the economy impact how or when you rebalance? You rebalance when your portfolio has strayed from your intended asset mix, selling things that have outperformed and buying things that have underperformed (or freezing the investments that have done well and directing new money into the ones that haven't - either way works).

[kv968]

Then, I think you should turn off CNBC and watch SpongeBob or some equally entertaining show.

Hey, sometimes SpongeBob has some good stock picks. Oh, wait a minute, that's Cramer. Sorry