For certain the end of the stimulus program, announced few months ago, is a positive sign for the risk-accepting investors. It`s a green light for all of the investors on the market crying out loud that sunny days have come. Meaning that the economy is stable, unemployment rate is at a good bellow 6% level, petrol price plunged bellow USD 100 and it`s a good time for more aggressive investments to start.
It is the nature of investors to assume some risk. Some are willing to take huge risks while others are much more conservative in their approach. Now that the Fed's stimulus program is ending, investors must find a way to supplement that income. It is the nature of the market to fluctuate and investors will have to look into some of the less predictable investments.
Investors will be looking at the high risk investments as a better option. High risk investments typically yield higher amounts of gain at a faster rate. With the stimulus ending, investors will need to take these risks to increase profits quickly. Even though the risk is high with no stimulus they will overlook that and invest.
The bond market has been strong and I have a feeling it will remain that way. People are already going on risky endeavors with the stock market, I don't think investors are going to go out on a limb just yet. Secondly, once the Fed loosens their grip on the interest rate risk will be something that isn't required to invest.