Today the Fed cut the overnight lending rate by .75 points.
The stock market responded with the highest gains in five years.
A reporter has a choice:
- Explain the pitiful state of the economy that requires such drastic measures.
- Analyze the the move as a demonstration that there are still many buyers in the market.
I remember a Finance professor in the Arizona State MBA Program who said that psychology can always be found behind the moves in every market. He explained that there are opportunities in upside down markets. In each market, every seller finds a buyer... even if "the buy" is perceived to be low.
We are in an economic downturn- about that there is no speculation.
But in this downturn there are opportunities.
Here's some more "bad? news":
New Home construction fell by .6% ... the experts expected a .2 % drop. The news outlets will most likely report this as further proof of a horrendous new homes market. My take on this information? Great news for builders. Maybe they can unload more inventory rather than flood the market with more new homes.
Even more "bad? news":
We may already be in a recession. For Arizona that usually means we entered the recession sooner than most of the nation. The good news in this? It has been Arizona's history to springboard out of recession sooner... each time with impressive growth.
I'm not an advocate of ignoring the news.
I am an advocate of looking at the big picture and figuring out what some of the markets signals really mean.
This is the way to find bargains and investment opportunities.
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Chuck Willman is the founder of USA Vest network- a collection of investment minded individuals who specialize in real estate. He also helps first time home buyers join the home ownership ranks by assisting them in finding low money down homes.
Chuck Willman: 480.292.0600
www.azvest.com
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