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We're looking out for your -- portfolio tonight with money moves to make and not to make well before the party n.'s Rick -- CEO of settlement financial group joins me now.
Rick I have to tell you wrote.
I you are my top pick is the guest in the eight block tonight.
Because you have such great experience in helping individual investors.
Through these kinds of days.
And -- look here's the kind of coverage we've had today it's been it's been breathless.
Points in two days.
People are really upset and the Fed didn't say they were to take their foot off the gas pedal they just said it could happen before year's end.
Do you think the markets of the professional investors are overreacting.
Completely Gerri I'm so thrilled for your continued focus on the individual investor because that's what's that's what really counts here.
The markets are ridiculously over reacting or acting like three year old who lost their lolly pop.
And it's really ironic because these -- the very same people been complaining about the federal -- support by the Fed.
And now that -- -- fed says that they may take back that support -- complaining again you just can't give something.
Happened well let me tell you what is down to a -- simple.
-- let me tell you what people are focused on right now I wanna show folks to chart of the Federal Reserve balance sheet because they expanded expanded expanded.
And as they have the Dow has gone up up up at all the emails I get from viewers that tweaks what we see on -- FaceBook page.
People don't trust this market and it's because of this chart.
They believe that Ben Bernanke is responsible for this four year bowl run and they think it could collapse at any time what do you say to that.
I say that that fear is unnecessary because Ben Bernanke is not stupid neither -- the other fed governors they understand the reality of the situation on that chart is very valid.
There's no question that our economic recovery is due in large part to the Fed activity right so the Fed is saying what Bernanke was really clear and you said this in your opening.
He is saying that if the economy continues to improve meaning the Fed impulse is no longer necessary to sustain the economy.
No withdraw -- allowing the market and corporate profits on the growth -- natural economy to take over.
He's not threatening to pull the rug out from under -- he's saying.
I'll pull the rug out if you're no longer standing on it -- -- not ready to be a crisis you know what this reminds me -- now.
And this is my -- speaking this reminds -- Alan Greenspan.
It now -- -- wouldn't take a punch bowl away it would just go line is not denied the bubble would continue to grow -- remember this.
He kept rates low until yes and eventually the bubble worse what the hell we all got -- -- but there is that going to happening.
-- -- You know two really big differences between now and that number one.
Is that the Fed has learned from its past and no better than Bernanke whose PH game was on the Great Depression.
So they have studied very closely the mistakes of the Fed in the past.
And are determined not to make those same mistakes number two a world of difference between Ben Bernanke's fed and that of Alan Greenspan and that is.
Alan Greenspan you're never would have told us what he was planning to do several months from now.
Really great -- finally here's the Bernanke is telling us so that we can deal that it dissipated and evaluate.
If that's what we're doing right now I get -- what's going on.
Let me should tell you something that I think is -- -- that's happening in the market right now I don't I'm not sure -- really seen this happen quite the same way.
-- last few weeks investors took seventeen billion dollars out of bond mutual funds.
People act sitting bonds now people -- -- stocks at the same time.
Normally people choose one of those asset classes over the other.
Normally by the going down stocks are going up -- stocks are going down bonds are attracting a lot of investment what do you think people are doing with their money.
There's their parking at they're sitting on the sidelines because I'm not sure what's going to happen next the good news is people are listening -- -- You've been warning people regularly about rising interest rates and how bond prices can fall so there -- heeding that advice which is very good.
And they are moving out of long term bond funds but they're also now worried that stocks may do badly due to rising interest rates and this is where consumers are making a mistake.
What people don't understand is that rising rates although they're bad for long term bonds.
They are good generally for the stock market.
So this is a wonderful buying opportunity stocks are not overpriced the market reaction to the last two days is what's.
Over Don and people should recognize that stocks remain a very good solid place to -- So the take away here Rick -- look for some bargains out there Rick thanks for coming -- tonight really appreciate your time on a day I know a lot of people out there.
What some advice from -- pro thank you.
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