FOMC Meeting – The Fed Effect on the Stock Market

Well we are heading into the FOMC meeting where everyone gets nervous about things we already know, Feds not going to cut rates any lower, duh! Most likely when the Feds make a statement to the public annoucing they will not be cutting rates for the entire year at first the stock market will panic and then come to its senses because its already been a known fact that has been engrained into our daily stock market media news.

Current prices in Hawaii’s home market (the housing sector of the market) is tanking putting smiles on cheap investors like me. I wouldn’t call a 240 sqft studio with $400/condo fees for $136,000 cheap, but compared to just 2 months ago the sellers were asking $160,000 which is a big cut. Hundreds of homes and condos in Hawaii’s high priced selling market are finally coming down because buyers aren’t willing to pay those prices and they are truly not affordable making renting the smarter choice. Now I am actually looking to buy again getting approved for a new loan. If I do get qualified I will buy something in the middle of downtown Waikiki near the surfing beaches and shops for a prime rental unit later down the road. Even if my mortgage and condo fees together cost me $1500/month I can easily rent it for $3,000/month or $750/week to vacationers looking for a hot spot to stay in. Average hotel room is $150-300/night so for $100/night it is a bargain to own and use as a rental. Now I just need to get approved.

The Fed meeting will more likely increase rates so you really want to buy before this happens. If rates go down that is a good thing to lockin on a 30 year fixed mortgage. My current income is only around $44,000 plus if I do anything part-time might add another $6,000 a year. If I make any serious chunks of money in trading stock options I use that to pay off my mortgage or car first. I’m hoping to advance and get a nice $500 extra pay raise a month before 2008. Depending on how the Fed talks positive or negative on the current economy stocks could stay flat or turn sharply in either direction. This is basically the Fed’s effect on investors in the market making them panic or be confident about their portfolio. It really doesn’t matter for me I just want to know a fixed answer from them.

Another thing I’d like to mention in this blog with my condo buying info is that now because I did buy my first new car and have a $430/month payment it will hurt me most likely in borrowing power to buy a condo. The fact is I don’t want to get something that will gobble up my entire paycheck at the same time if I buy something else to rent out I will still have that new mortgage plus the cost I will have to pay to rent my own place in hawaii which will most likely come out to the same or more. I’d really like to own a condo in Hawaii. I blog about if I able to get one or not with the lowered prices soon. If I get a second job that would be an extra stream of income to pay off my car which I want to do first to increase my cashflow again.

Currently the market isn’t doing much but recently OIL energy stocks are really showing a change in direction and I’m playing PUTS on OIH. I basically need it to hit around $129 to call me out to make 25%. I also think NUE, AAPL, and CMG are about to head higher.