Ben Bernanke Says “Buy Stocks”!
Don’t take it from some CNBC analyst. Don’t listen to Bloomberg. Heck… don’t even take it from me.
The best part is you don’t have to. Because we just got it direct from the horse’s mouth!
That’s right. We heard direct from the source that it’s time to get back into the market. Folks… your favorite bartender has spoken and he’s serving up more party punch!
I’m thirsty, I don’t know about you. So listen up…
Ben Bernanke, or Big Ben as I refer to him around the office, just told us the Fed will keep interest rates exceptionally low “at least through mid-2013”.
I’ve got to tell you, I’m really excited.
The Fed’s move yesterday is the buy signal I’ve been waiting for. And the timing couldn’t be better.
The Fed’s signal is effectively the next crutch for the economy. And they’re not buying assets this time around.
Here’s what they’ll do for the markets…
We’ll see dirt cheap money for another two years. And that will keep investors buying assets as they can borrow US currency on the cheap. In fact, the Fed pretty much just guaranteed it!
The already suppressed US Dollar is likely to remain under pressure for some time. And in doing so, we’ll see higher US exports and export companies profiting along the way.
The Fed’s low rate policy should allow the recovery to finally take hold. I can actually see corporations finally hiring to ramp up productivity and expansion in this new era of cheap debt servicing. As a matter of fact, I think corporations were holding out waiting for QE2’s end.
They wanted to see how things would turn out after the Fed pulled the economy off life support…
Thankfully, they won’t have to. And in the process, we should see unemployment numbers turn around finally!
If companies can bank on cheap debt for some time, they’ll be more likely to hire. And when the country goes back to work, we’ll see one last great benefit…
Lower unemployment combined with low interest rates should encourage home buying. And the housing market may finally turn.
Now, you may be thinking, “Those are some big leaps of faith there Karl…”
And I’ll agree. But when it comes to a turn of events, I think we just witnessed a major long-term change for the better!
The best part is this… the Fed’s announcement was perfectly aligned with a massive 20% selloff dating back to July 25th!
Now some of you may be reading this and thinking to yourself, “A 20% correction is great, except I’m already in the market.”
I’ve been telling subscribers for months to get into cash. While I didn’t know a 20% correction would happen in less than two weeks, I did see a sell-off coming.
You may recall these words of wisdom from an article I wrote June 15th…
“The second action to take is to start exiting equities! It’s a tough call, but right now I only see the markets heading lower from here. Preserve your capital by selling some of your stock holdings.
We are at the crossroads of a very serious financial correction…”
I think we have enough of a case to start buying back into stocks right now. Here’s why…
We got the buy signal from Big Ben today. Clear as a bell. He told us it’s time to party again. Pretty simple and straightforward. There’s no doubt about how to interpret the Fed’s latest move.
Now, after the recent rebound off of the bottom on Tuesday, we may be tempted to dive in head first. But experience calls for prudence. While I’m not calling “all in” just yet, I’m starting to build positions in various companies with compelling stories and valuations.
It’s time to get that cash off the sidelines and back to work.
Next week I’ll share with you a few of the top stocks I’ve bought and why.
Until then, consider getting back into the market while stocks are dirt-cheap…
Category: Bonds
