Risk/Reward Vol. 344
THIS IS NOT INVESTMENT OR TAX ADVICE. IT IS A PERSONAL REFLECTION ON INVESTING. RELY ON NOTHING STATED HEREIN.
Having just returned from a week of skiing, this will be short.
. Both major indices took a slight breather last week, despite the economy showing continuing signs of improvement.
. I don't see any retrenchment in the equities market, but any significant increase from this point may be dependent upon progress by Congress on legislative initiatives such as tax reform and repealing and replacing Obamacare.
. Big news this week may come from the Federal Reserve. A rate increase is almost certain. However look for signs in the "dot plot" as to how many increases one can expect this year---3 or 4. Also look for any sign that the Fed will begin reducing the size of its massive balance sheet.
. Keep an eye on the Fed's impact on the US Ten Year Bond. Its yield spiked to over 2.6% on Thursday but fell below that barrier by week's end. A sustained rate in excess of 2.6% may signal the end of the decades long bond rally at least according to the erstwhile Bond King, Bill Gross. This is of great importance to me.
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