Good evening.

The market was up over 1% today, based on some positive comments by the Fed.

Economy leveling out, but rates to stay low a while

WASHINGTON (MarketWatch) — The Federal Open Market Committee promised again Wednesday to keep interest rates exceptionally low “for an extended period of time,” even as it drew encouragement from the stronger economic outlook.

In its statement after a two-day closed-door meeting, the Federal Reserve’s policy-setting FOMC said it would slow its purchases of long-term Treasurys and let the program die a natural death by the end of October, a decision that could send long-term yields higher.

In the main, however, the Fed said its policies are working and expressed no desire to tighten its extremely loose monetary policy. The federal funds target rate will remain at 0% to 0.25%.

When those yields jump, and they will, look for a lot of money to be attracted to it and out of the stock market, to get the higher yield at relatively no risk.

The key, you see, is not just where is the higher possible return. If that were the case, you should invest at the race track on bang tails. No, the key is where do you get the best risk adjusted return.