The Fed had just cut rates by 25 basis points. This is the headline I see from Yahoo news.
“Stock Falls After Fed Cuts Rate“
This is another headline I see from the previous month:
“Stocks Rise on Fed Cut”
If you are a long term investor, should you even be concerned with whether the Fed is cutting or raising rates? This is what Warren Buffett has to say:
No, I don’t put my money on Fed decisions. I’ve never bought a stock or sold a stock, I’ve never bought a business or sold a business, based on what the Fed’s going to do. And if (Federal Reserve Chairman) Ben Bernanke whispered in my ear exactly what he’s going to do tomorrow, it wouldn’t change anything I’m going to do today.
Well, I read about it. But in terms of making stock decisions, I mean, if we bought Coca-Cola in 1988 at a tenth of the present price, I don’t know what the Fed was doing then. If we bought Washington Post in 1973 at one one-hundredth of the present price, I don’t know what the Fed was doing then. It really, to an investor, it should not make a difference.