Bill McBride over at Calculated Risk has put together an interesting QE Timeline – in his post he outlines what occured at each of these stages and has included the graphic that I am linking to below. It is interesting to think about the implications that these market manipulation programs have on the overall market. If the programs truly are causal to the market direction, we should be looking at an upward market over the next time period despite the other signs in the economy.
This would be despite Europe concerns, impact of healthcare, hiring, consumer/corporate spending, or any of the other indicators out there. Of course as I mentioned before most of these “market making news numbers” shouldn’t be used in retail investment decisions. Regardless it is important to understand the general direction of the market as a retail investor. If the market is generally falling while you are holding low cost market ETFs vs. dividend or under-valued stocks you would want to look at not participating in the downsides and participating in the upsides. On the other hand if you are holding under-valued stocks (as in buying a stock cheaply through an Employee Stock Purchase Plan – ESPP) or are earning your returns from dividends, the market direction has influence – but less correlation to the ability for you to earn returns.