The market is tightly focused on the output of the FOMC meeting. Yesterday, the Financial Times ran an article saying the Federal Reserve will be signaling a likelihood of tapering sooner than what may be currently be built into market expectations. Stocks pulled back until a late day rally on a tweet from the Financial Times reporter indicating he had no inside source. We do not expect to see significant market movement until Bernanke makes his speech tomorrow.
Rate uncertainty has created some opportunities. One area of interest is global real-estate investing. Real-estate is showing steady strength and the recovery is expected to last for years. Many analysts do not believe the real-estate bull trend will be disrupted unless interest rates go substantially higher. An easy way to increase your real-estate exposure is through the Invesco Global Real Estate mutual fund (AGREX). Since the release of the FOMC minutes on May 22, the fund lost roughly 12% of its value. This appears to have been an over-reaction. It is quite possible that when Bernanke clarifies the Fed position on tapering, AGREX regains much of this lost value. You may want to check with your advisor or broker to discuss which fund class you should buy to avoid paying a load fee. Invesco offers a load-waived class A fund.