Prepping Your ETF Portfolio for the Fed's 'Work in Progress'
NEW YORK (
ETF Expert) -- In a recent column about central banks rescuing struggling economies, Joe Calhoun at
However, Calhoun takes his condemnation of interventions by central banks (U.S. Federal Reserve, People's Bank of China, European Central Bank, etc.) one step further. He laments the circumstances as being horrific for the long-term valuation of corporate stock assets because "weak growth limits the top line and inflation ultimately erodes the bottom line."
Here's where I depart from Calhoun's simplistic assessment. First of all, stock valuations don't mean a hill of pinto beans when irrational exuberance (e.g., 1996-2000) or walking-dead pessimism (e.g., 2009-2012) are in play. In both instances, analysts justified overvaluation and undervaluation arguments based upon different P/E varietals; in both instances, regardless of P/E assessments, stocks appreciated dramatically.
Should investors not have sought to profit from the late 1990s "New Economy" hype because it was irrational... or should they have rode the wave with a sensible and
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts