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V. 20:8 (78-81): Waiting For The Fed by David Penn

V. 20:8 (78-81): Waiting For The Fed by David Penn

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Waiting For The Fed by David Penn

How are monetary-based stock market timing models holding up in the Age of the Bear Market?

One of the most powerful tools for analyzing the financial markets is an understanding of the Austrian School of economics. Whether the Austrian in question is Ludwig von Mises, Murray Rothbard, or any number of others, as author and hedge fund manager Mark Boucher wrote: Once you understand [the essentials of Austrian economics], you will find it hard to believe that anyone could invest without [them] it is one of the easiest and simplest methodologies for improving long-term profitability and cutting risk in investing in equities, bonds, and other asset classes.

While the whole of Austrian economics is too much to be covered in this article, there are some quick basics that will make the concepts easier to understand. The Austrian model starts with a market that is thoroughly free from government intervention, save for the protection of life, liberty, and property. Any form of intervention in the free market, states the Austrian approach, is an artificial obstruction (or accelerant) that will eventually lead to a misallocation of resources.
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