So FED dovish is bad and FED hawkish is bad…surprise meeting Feb 14

Very new to the market (one year investing) so I´m no expert and don´t pretend to be it. Just trying to do my best in learning and invest for the future (long-term goal, no margin, no options, only DCA). But I finally understand the famous quote “the market can remain irrational more than you can remain solvent”

The ways the market seems to react to news is irrational . We all knew inflation was going to be a problem so when the FED behave dovish the markets had a brief rally only to crash because the FED didn´t do anything. Then they announce possible rate hikes (normal and healthy long term) and everything crashes again because the FED will start increasing rates. Now we have record inflation (expected, not surprising) so it crashes again on expected news. Now the FED will become more strict (hawkish and expected) and the markets will crash again. FED doesn´t speak (bad), surprise closed meeting 14 February (bad)

Market Sentiment:

  1. Raise rates announced (expected, bad for markets).
  2. Announce 1-5 hikes (bad, not enough). 6-7 (bad, too many).
  3. Announce 0.25% hike (bad, not enough); 0.5%-1% (good but bad to high)

So in my humble opinion, every news about the FED or the whole world this year (good or bad) will tank the market, nothing is priced in.

I will continue to DCA for my long-term goal but in the short term is going to be a very bumpy ride.


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