Fed to Scale back Investments 26

The government is a little bit backwards, but maybe that’s just how things are supposed to be. At a time when smart investors are finding new purchases to make a killing on, Uncle Sam is scaling things back and trying to get less involved. Weird, right?

Basically the Federal Reserve thinks now is a good time to lower its monthly purchases of mortgage securities and Treasury securities. They want to head back to more reasonable levels, namely $35 billion in mortgage backed securities and $40 billion in Treasury securities. That’s monthly, in case you weren’t sure.

Here’s my take on things. It’s definitely moving in the right direction if the government is keeping its hands more or less out of the private market. It throws things off and complicates what should be a stable and simple process. And it just adds risk of bringing us back to an unstable environment.

But I think this is a cue for investors like us to dive in even deeper. There’s going to be more opportunity than ever to find great deals and see investments outperform expectations. I’m excited about what I see coming in 2014 and I hope you all use this moment to grow your businesses.

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