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The third round of quantitative easing: where to invest money

Published: Tue, 08/28/2012 - 20:22
By: admin

As we approach the date of the presidential election in the U.S. probability of a third round of quantitative easing, the economy is growing. The administration of current President Barack Obama wants to show voters without progress in the fight against unemployment, at least showy steps taken in this direction. It was spectacular, because the effectiveness of quantitative easing is not evident.


Fed may resume infusion cheap liquidity into the U.S. economy in the coming months. Investors should have an action plan in the event that if the beginning of the third round of quantitative easing will be confirmed officially. What assets will increase in value as a result of the possible adoption of the new Federal Reserve stimulus package?


    U.S. stocks continue to rise if the financial system will have a new batch of low-cost resource. However, remember that in the short term, the market may fall upon confirmation of a third round of quantitative easing. Investors who entered the market for a long time, will record profits.


    Gold has lost its status as a protective asset, becoming risky instruments. The price of gold can rise as well as fall after the Fed confirmed. The growth can be attributed to the desire of investors to protect funds from inflation caused by injection of liquidity into the markets. Decline will be driven by the desire of players to leave the gold in stock. Investors should monitor the position in gold due to the unpredictability of his behavior.


    Government bonds will be in less demand as investors will want to capitalize on the growth of the stock market. As a result, the yield on debt securities may rise, making them a promising defensive tool.


    Residential real estate remains one of the most promising investment instruments in the U.S.. Quantitative easing will allow bankers to increase mortgage lending, which would accelerate the recovery of real estate market.


    Oil price will rise after confirmation of quantitative easing, as it will increase demand for raw materials in the U.S.. In addition, the probability of a military strike on Iran is quite high, which also contributes to higher oil prices.


Experts claim that the U.S. Federal Reserve is preparing to announce a new package of economic incentives. So, the question is only in terms.