Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Thanks, Brandy.
Brandy Auterson-Hurst:
So there’s been a lot of focus on the Federal Reserve lately, what are they signaling and how does it impact the market?
David Nelson:
Well, the Fed really plays a major role as far as in molding as far as expectations, and they do that through various releases as far as of information, data, words. And what we see is that the chart that I brought along today, in red on the bottom, is basically a method of looking at as far as what they’re saying and trying to track that and put it into real life experience where people can use this data and try to make decisions.
And what we see in red there is that when the Fed is taking a more hawkish type view of the market, we have a tendency to see the red go up. And now, on the top is the stock market and it’s moving down. So this is really important. What the Fed is saying on a regular basis is being monitored by Wall Street, and they’re very careful as far as in the wording, and when you see red going up, that’s basically, again, a hawkish type view. When we see the red line going down, that’s more of a dovish type move, which is typically very good for Wall Street, not always, but most of the time, it’s going to be. So point being with all of this, the information, we try to compile it to try to put it into useful information for individuals to make these really, really important decisions.
I’d wrap it up saying, and this is really crucial, people say, “Well, what should I do as far as in this type of environment when the volatility is increased like we see?” And I would just repeat what we repeat on a regular basis here, don’t fight the Fed. It’s a pretty dangerous thing to be going against the grain as far as what the Fed is saying.
Brandy Auterson-Hurst:
All right, David, as always, thanks for joining us today.
Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.
Indices mentioned are unmanaged and cannot be invested into directly.
This video includes a paid appearance.