Those cheering today’s sky-high asset prices say they don’t worry because “the Fed has the market’s back” And they haven’t been wrong to-date. There’s no doubt that the Fed’s $trillions in monetary stimulus has pushed the prices of stocks, bonds, real estate and nearly every other asset class to all-time highs. But the Fed’s ability to print money with impunity may not last forever. In fact, veteran money manager Bill Fleckenstein warns it could end this year. And Bill isn’t alone.
61% of business economists say inflation risks are the highest they’ve been in two decades, and 46% of members surveyed by the National Association of Business Economists predict the Fed will be forced to hike interest rates sooner than it’s currently forecasting. Bill predicts that such forced tightening by the Fed will throw today’s stimulus-addicted markets into anaphylactic shock, resulting in a heck of a lot of losses. Which is why he agrees that now, more than ever, is the time to partner with a financial advisor who understands the nature of the market risks in play as well as the opportunities, can craft an appropriate portfolio strategy for you given your needs, and apply sound risk management protection where appropriate.