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June 16, 2016 | US Fed Tools Not Effective

Adrian Mastracci

Adrian Mastracci, Discretionary Portfolio Manager, B.E.E., MBA. My expertise in the investment and financial advisory profession began in 1972. I graduated with the Bachelor of Electrical Engineering from General Motors Institute in 1971. I then attended the University of British Columbia, graduating with the MBA in 1972. I have attained the “Discretionary Portfolio Manager” professional designation. I am committed to offering clients the highest standard of personal service by providing prompt, courteous and professional attention. My advice is objective, unbiased and without conflicts of interest. I’m part of a team that delivers comprehensive services and best value in managing client wealth.

My investing premise:
“Janet Yellen is telling us that the tools in the US Fed toolbox are very sparse. Further, the remaining tools are not effective.”

Years of low interest rates have tied the Fed’s hands.
Investing the precious nest egg will become more challenging.

For my investing, I’m assuming no interest rate increases until the end of 2017.
This implies that world economies will not be robust.

I think that it is unwise to be 100% invested in stocks during such times.
Similarly, the same applies to anyone 100% invested in bonds.

Little will change, even if we get the occasional 1/4% rate increase.
Hence, I’m prepared to invest within the low return environment.

Normally, this could be a worrying situation.
However, don’t discount some perfect storms along the way.

I expect blustery times from time to time.
Such situations should present buying opportunities for those who are prepared.

Five things need to be highlighted:

Keep some cash around to snap up the bargains.
Deploy that cash say up to 5% lumps when the sales are on.
Prices could fall even further after a sale.
Don’t waiver by second guessing yourself.
Make sure that your continued patience is a must.

As Warren Buffett once said:
“Sell into strength, buy into fear.”

That is a very powerful approach.
It will test your investing resolve.

Talk soon,

Adrian

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June 16th, 2016

Posted In: Adrian Mastracci Blog

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