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It's hard to believe that Monday's 200-point drop in the Dow Jones Industrial Average was the first such drop in nearly four months. Complacency can be treacherous in investing. Yesterday's drop was blamed on the election gridlock in Italy. If Italy is causing such volatility in the U.S. markets, what are we in for when the Federal Reserve decides to abandon its low-interest policy, stops buying securities and hands off the fate of the U.S. economy to the consumer and corporations?
For what it's worth, I think the handoff will be better than most expect it to be, but perhaps not as smooth as any of us would like. Stocks aren't cheap today. They aren't at crazy valuations either, but the pool of multi-bagger investment opportunities is all but extinct -- unless you are willing to dig deep into special situation investments. Never mind multi-baggers, even finding securities capable of 15% annualized returns is not as easy as it once was. Still, with banks paying less than 1% and having to lock up your cash for five years or more to earn 3% a year, achieving a 6% to 10% annual return from the stock market over the next several years would be a stellar result for most investors today....365 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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