Confusion. Even on days where the dow dipped 15 point nasdaq closed down 0. 02 . Lets start with politics. A subject im usually loathe to talk about but the election is only eight days away, so lets give it its due. On friday, we learned that fbi director jim comey had decided to examine a whole new bunch of Hillary Clinton emails found as part of a separate investigation to disgrace former congressman anthony weiner. Immediately the entire market took a hit. It was instantaneous. But right after that, a great deal of the market rebounded. Buy, buy, buy. Okay. First the market went down. Sell, sell, sell. On the news because investors dont like uncertainty. For weeks now the markets gotten accustomed to the idea of a Hillary Clinton presidency whether we like it or not. Thats irrelevant. Not a political statement. Just a reflection of what the polls say and how the stock market teinterprets that information. Why did the market rebound almost immediately . I think ive got the answer. An
S p rocketed 2. 2 . Nasdaq pulled away at 2. 37 . No, no, no. Listen to me. What the markets love is certainty. For months clinton seemed like a sure thing, but then those new emails surfaced a week and a half ago and stocks got slammed as the race suddenly seemed like it could go either way. That sent investors fleeing to the sidelines, raising cash, not because of trump but because you cant gain an election if you dont have a clue who is going to win. Now the fbi has said the new emails dont change anything, meaning theyve taken the possibility of an indictment off the table. So things are looking a lot more predictable again, at least for now. This morning, squawk on the street cohost joe concernen asked me in the cross talk i do with him whether i missed just talking about corporate earnings. What a blessing of a question because i sure do. I long for the market to be, well, a market. The market again, where we Value Companies based on how well theyre doing, not as part of a vast b
Theres no real risk of keeping Interest Rates low right now, then they should stay low. Thats why the stock market initially greeted the stay put decision with such applause. Dow rallied 193 points before the averages pulled back late in the day as traders rang the register, dow closing down 65 points, s p declining. 26 and the nasdaq advancing. 1 . Remember, i told you we were likely to see a postfed meeting selloff even if they held off on a rate hike. In part because the market had already run up in anticipation of precisely this decision. So the traders who got it right have every reason to take profits, even as long term investors like you should be much relieved that this fed is taking into account more than just seemingly strong employment figures when it makes its deliberations. Before i explain why todays decision made so much sense to me lets get some darn things straight. If the fed had raised rates today, then i fully expect we would have been down 500 dow points pretty muc
Not just investing, but every aspect of your financial life. And sometimes that means we need to take a deep breath, step back from the daytoday nittygritty of the market and no cuss on the educational side of things what i call investing 101 honestly, if any university was ever crazy enough to give me tenure, i could teach an entire semesters worth of classes on just the basics. But, of course that, presupposes that any institution of Higher Education here in america would be interested in teaching how to manage your money. A topic thats a little quintinian for the ivory tower types that run most colleges, you can get a bachelors degree in economics without knowing how to balance a checkbook. Thats not going to change, but we can do our best here on mad money to help. So investing 101. Whats the first item on my sill syllabus of the class . We need to thank you about savings. If you dont save, you will spend the rest of your life to a slave to your paycheck or the hostage to the Socia