More important, with so many investors pricing in upward pressure on interest rates, income investments such as REITs, MLPs and utilities are well positioned to outperform in 2014.
We're still very much in a "buy the dips market" right now. There are very few cracks showing in the current rally, even if some investors are starting to get worried that stock prices are getting ahead of themselves. Compared with historic valuation levels, they're just not.
So forget about jobs numbers, housing prices, and the other economic metrics Fed-watchers are harping on right now. Since the "Great Recession," the Fed has used 2.2% forward five-year inflation as its yard stick for whether it was time to hike stimulus efforts. And that QE gauge is starting to look shaky again for the first time in a year.
While a Fed action isn't imminent yet, it's starting to look a whole lot more likely.-- Written by Jonas Elmerraji in Baltimore.
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