Beware of FOMC meeting dates

The current volatility in Wall Street may not go away soon. The political uncertainties in middle-east, terrorist threats almost everywhere (India's financial capital Mumbai was attacked this week), rising oil prices and some lower corporate earnings may all work together to ensure that uncertainties should go on for quite sometime.

In the midst of all these there would always remain the inflationary fear that would haunt traders from time to time. In particular, one must keep in mind the following dates when you may expect severe downturns in stock prices: August 8th, September 20, October 24, December 12. These are the meeting dates of the Federal Reserve when the committee would decide the fate of the short term interest rate. If traders anticipate a hike in the rate, they would sell off in fear of lower level of consumer spending and less corporate earning. If Fed does not hike the rate, that would be read as an indication of downturn in our econonomy and traders may sell off in that case too.

So, just keep those dates in mind. If you see too many positive news in between, don't just get carried away. Although we all know the basic motto of investing, that is 'buying low and selling high', most of us trade out of emotion. We sell when the world looks grim and we purchase when the world is singing songs. Just be reasonable in coming months. Select stocks or funds carefully and, if possible, take those opportune moments before or after FOMC meeting dates to purchase some of those in your selected list at a lower price.