by Sasha Cekerevac, Investment Contrarians:
While Fed Chairman Ben Bernanke’s announcement that a reduction in the asset purchase program will begin later this year was not a surprise to me, stocks felt the impact as selling ensued across the board.
However, though the S&P 500 did pull back, it is still near its all-time highs. Over the past few weeks, I have been recommending that readers reduce their overall exposure to the S&P 500, and any other assets that have benefited from the stimulus program for that very reason.
In addition to beginning the reduction of asset purchases, the Federal Reserve chairman stated that he expects to end any asset purchases by next year, and to begin raising the Fed funds rate in early 2015, as opposed to previous Federal Reserve statements that indicated that the Fed funds rate would begin to rise in late 2015.
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