Was All Of The Buildup Just A Waste?

Yesterday stocks panicked lower and today they are chasing higher. What, if anything, does this mean?

Yesterday I thought that the net of the rate hike and statement would not mean much. I think it is too early to say for sure. Regardless of the next few days there is something very constructive here. The rate issue will never resolve. The market seems undecided on 5.25%. The Fed will stop at some point and then what? Speculation on when they start cutting rates. Once they do start to cut rates, how low will they go?

The media portrays this as getting some resolution but that is not how it works. Clearly the market cares about this on a short term basis but economic cycles will always come and go and a big chunk of the market's reaction to different trigger points will always be similar, not the same but similar.

Changes in the economic cycle also play a role in the way I manage portfolios. Stocks usually decline in front of a recession and usually turn up in front of a recovery. Going further certain stocks are better early cycle performers and some are better later in the cycle.

The extent to which you try to game this stuff short term, perhaps you can add out performance but longer term being in touch with the historical implication can allow you to tweak your portfolio slightly to capture some benefit. Understanding the history can make the job much easier.