Investors should stick with the rising S&P 500 because inertia is a force so powerful that not even the Federal Reserve can overcome it, according to Stephen Duneier, CIO of Bija Advisors. ‘What has worked going back to 2011 I believe is going to continue to work for some time to come, at least until we get some truly institutional changes and those are going to be more federal than they are monetary,’ said Duneier. Duneier said the Federal Reserve has essentially become ‘impotent’ and the trend toward wealth and income disparity in the country is now more important than the latest statement from Fed Chair Janet Yellen. ‘Fundamentally the Fed is no different than any other institution or corporation. They are in the business of behavior modification of their target audience. What it’s important to understand is their target audience has changed radically. So the whole reaction function between the Fed’s tools and what they are hoping for as behavior out of their target audience is different,’ said Duneier. And while many see the Fed’s strategy to keep rates low as a means of pushing investors into risky assets like stocks, Duneier does not see owning an S&P 500 index fund as a risky maneuver at all.
Subscribe to TheStreetTV on YouTube:
For more content from TheStreet visit:
Check out all our videos:
Follow TheStreet on Twitter:
Like TheStreet on Facebook:
Follow TheStreet on LinkedIn:
Follow TheStreet on Google+:
source
