That often repeated investment mantra has taken on more relevance in the age of Covid-19 and the never ending stream of QE.
The general market reliance on the Federal Reserve is not only what is driving many investor's decisions of late, but it will likely reach its peak in the coming years. But one is going to have be very careful before they buy into this fallacy too deeply.
I am told over and over again that one cannot fight the Fed. Unfortunately, history does not support this proposition. Allow me to begin with the events surrounding the Great Depression, and the Fed's inability to stem that tide:
"The Federal Reserve System, from February to December 1931, increased the issue of Federal Reserve notes by 80%. These issues were due to bank failures which made necessary a larger use of cash. Yet, after a wave of bank failures . . . both banks and their depositors began raiding each other in a cut-throat competition which more than defeated the new issues of Federal Reserve notes." Irving Fisher, Booms and Depressions, 1932