June 30, 2011-the end of QE II

[general35]

What is going to happen. I've been advised to get out of the market and did about 2 weeks ago. Many are predicting a tumble.

Markets have tanked in May not because of the Doomsday prediction of Harold Camping. Rather, investors are scared of the 'Armageddon' on June 30, 2011 - the end of QE2.

The importance of QE2 on the financial markets cannot be emphasized enough.

The rally that started in March 2009 rode the liquidity tide of QE1. Then, from April to August 2010, investors bailed on the market as QE1 and fiscal stimulus measures faded.

The market then rebounded in September after the Federal Reserve hinted at QE2. In December, President Obama's tax compromise with the Republicans gave investors further confidence.

Fast forward to May 2011, investors are once again uneasy over the looming end of QE2 and have trimmed their holdings of risk assets.

The end of 2010's QE1 and 2011's QE2, however, have some differences.

In 2011, a positive factor is that the economy hasn't deteriorated in the months before the end of QE2 (with the notable exception of the housing market). A negative factor, however, is uncertainty over how the end of QE2 will affect Treasuries, a market into which QE2 will have propped up with $600 billion by June 30.

 

[YoLaDu]

i am staying in.

Getting in and then getting out, then in again and out again would have led to disasterous results for me.

I am keeping it in, maxing my 401K contribution and remaining diversified. Just like always.

 

[BrothaHorn]

Selling off a few stocks and etfs..gonna hold a couple sleepers and look forward to QE III.

 

[ProdigalHorn]

I may be wrong, but I'm kind of with Yo - I just don't think jumping in and out is effective in the long run.

 

[Uninformed]

Yo is investing the right way or at least the smartest way to remain conservative and still get a good return.

 

[HornHuskerDad]

My advisor is doing some selective bargain-hunting now - he feels that there are some very good undervalued stocks available, and he's using some of my cash reserve to cherry pick. Remember, I'm an old retired guy now, and the principal strategy is a diversified mix - when I was still employed, I was very aggressive in my 401(K), and had to ride a couple of roller coasters. Glad I did, as I more than recovered my paper losses from the 2008-09 period. I suspect we'll see some form of QE to smooth things out after a couple of hard bumps.

HHD

 

[Gone To Texas]

Staying in. As George Costanza would say, I'm goin down with the ship.

 

[YoLaDu]

i can't believe any qualified financial advisor would advise a client to "get out of the market" for extended periods at a time.

 

[general35]

i can't believe any qualified financial advisor would advise a client to "get out of the market" for extended periods at a time.
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This isnt my 401k. It's a money managed fund in which they operate a very diverisfied portfolio based upon market fluctuations. in 2007, they converted to cash before the market crash, then attacked in a very aggressive manner following it. they have decided to convert to mostly cash again based upon the current economic conditions.