Comment by jfengel
6 months ago
You can't beat the market but you don't need to. The ordinary returns of GDP growth are pretty good.
The free money has definitely been screwing with GDP as a base. I'm still unclear on why the Fed would lower interest rates when the market is fine, the GDP is fine, and inflation is still slightly above baseline 2%. I know everyone is yelling for the punch bowl to come back but now would be a good time to pay down some debts.
> You can't beat the market but you don't need to.
You can, it's just difficult. Plenty of (mostly professional) traders and hedge funds do. The knowledge gap between amateurs and pros is just massive, as is the time they have to monitor their holdings.
> I'm still unclear on why the Fed would lower interest rates
There's a lot of space between where they started (0%) and where they topped (5.5%) and where they are now (4.5%).
As you approach a stop sign, do you wait to brake until you're at the sign or do you start slowing down as you approach?
At 5.5% the Fed became concerned (and I think rightly so) that they could overshoot into deflation territory so they stated easing to what they consider a current neutral position - somewhere in the 2.5% - 3% range.