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Fed-induced market coolings always create opportunity. The Pew Research Center--a major foundation--has done a survey and found that: 59% of all Americans have home computers. 29% log on to the internet on a typical day. (Amazing to find more than half can ignore their computers for a day) Of the 59% of Americans who have home computers, many are interested in investments and the markets. Of the Americans who have computers--one fifth have personalized Web pages for their portfolios! But: 71% of Americans are unaware of the federal budget surplus, and 56% have no idea who Alan Greenspan is. Now, it's possible that some of that 71%--and some of the 56%--don't have home computers, but statistically there has to be an overlap--and that means that most Americans have no idea where this boom came from. Only eight years ago, the budget deficit was such a bogey that the Republicans proposed a balanced budget as a constitutional amendment. Alan Greenspan has become an icon, and some Fed watching services calculate how thick the briefcase is that he carries to Congressional hearings. The talk in financial circles now is on whether the landing will be soft or hard, and whether high oil prices are doing part of the Fed's job of slowing the economy down. But investors who don't understand the context in which they operate are adding a layer of risk that is dangerous. If they market heads down, they won't know why, and if it really tanks they won't know what to buy to profit from the developments. Fed-induced market coolings always create opportunity.
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