For those who owns investments, common shares/stocks, or mutual funds, you're probably quite disappointed at the market right now. Though on the positive side, these two days will be a perfect opportunity to buy in because usually in situations like this the market over-sells and the prices will recover a little shortly.
The gist of it is this: everyone wanted Bernanke to give a firm commitment to continue their bond buyback and fiscal stimulus...well that didn't happen this morning. Instead we got the usual "we will keep it the way it is now until the market gets better, which if it does we will start tapering the stimulus gradually over the summer and beyond" (I'm paraphrasing here, not his exact words). Basically he didn't say anything, it's like if a mutual fund prospectus tells you "we strive for growth while preserving capital", or I tell you myself "the sky is blue!". Of course any mutual fund is going to be striving for growth while trying not to lose your money, is there one that doesn't try for growth or tries to lose your money? What investors were trying to gauge from Bernanke's speech this morning was whether the Feds think the US market will be weak in the coming months, if he states a firm commitment (either to continue or to reduce stimulus) for the summer, then investors can take that as a direction or have some sort of basis to predict what will happen for the near future. When people don't get the reassurance they need, they assume the worst and they sell, evident earlier today.
Anyways, I still believe that the US market will grow in the long-term over the next 12 months. For those who intend on holding an investment for a long time, then this is a good opportunity to buy.
Hope it works out for us all in the end!
-TT
