“It [the Federal Reserve] wants us to go out there and buy stocks, which are overpriced because bonds they have manipulated into being even less attractive,” (click here from FB) said Grantham, who is chief investment strategist of Grantham Mayo Van Otterloo, a Boston-based asset management firm, and a respected voice in the financial world. “So, we’re being forced to choose between two overpriced assets. That is not always a terrific choice to make because there is a third choice, and that is, ‘don’t play the game and hold money in cash.'” ( From CNBC)
I agree with the above, but would point out that the primary goal of ‘manipulating’ interest rates was to provide support for the housing market, as well as making money more affordable to support both business investment and private spending. The rise in equity valuations since late summer has been astonishing, and at these entry points, I am on the sidelines as well. Our favorite asset continues to be Gold. Jim Cramer was jumping up and down about it yesterday and is in words ” talk to me about price when it is 5% of portfolios.”
Have a great day.