Goodbye January Effect. Hello Disaster.

<p>Should we sell our stocks in anticipation for a stock market crash, or double down? Is there still a chance of the January Effect taking place? &nbsp;</p> <p><br></p> <p>🚀 Join the VIP Membership Group (Discord) today! ► elblancofinance.com &nbsp;</p> <p><br></p> <p>The FED is being hawkish. They are doubling the pace of tapering and will complete it by mid-March. After the taper is done, the FED stated that their preferred method of contractionary monetary policy would be to raise rates, rather than to use Open Market Operations / Quantitative Tightening (aka, selling bonds = the opposite of Quantitative Easing). This means that they could raise rates much sooner than expected. They also explicitly stated that their proposed course of action could potentially result in "financial stability risk" (= recession ?). No bueno. &nbsp;&nbsp;</p> <p><br></p> <p>How am I reacting to this? &nbsp;&nbsp;Something seems off to me. First of all, this information is nothing new. We've known about inflation for a while. We know with relative certainty that Omicron will take over the planet and disappear within the next 6 months. We also have a sufficient idea of how that's going to affect supply chain issues. &nbsp;&nbsp;Second of all, I analyzed the severity of these factors in depth. And yesterday, I was cool with buying the dip. Therefore, what has changed? My conclusion is that the ONLY THING that has changed is the FED's stance. People are only freaking out because of the potential for more contractionary monetary policy than expected, not because of the factors in question. I'm more concerned about the market's reaction to what the FED said, rather than what the FED is actually doing. The market is in panic mode. &nbsp;&nbsp;Keep in mind, the FED is only talking about tightening. They haven't actually tightened yet, and I believe there still is a chance they might soften as we approach the end of the taper. &nbsp;&nbsp;To me, this feels like a "fundamentals" vs "stock price" type of situation. Which one will it be? Whi