At the same time the Dow Jones Industrial Average lingers in record-setting territory, some experts are warning of a major correction.
Houston financial planner Michael Parmet won’t rule out a correction, but he urges caution rather than dramatic moves. The managing partner of Houston’s Parmet, Chapman and Madeson, CPAs and Financial Planners, says investors want to hear more information from Washington, D.C.
“The failure of communication by this administration is what’s driving the markets crazy,” Parmet says. “There is a lack of clear direction.”
Trouble could be looming on the horizon because the Federal Reserve has kept interest rates so low. Efforts to stimulate the U.S. economy are having an impact, as well.
“The administration has done so many things to try to create stimulation and that has not happened that way,” says Parmet. “It’s got to be a more systemic way – to encourage work and not entitlements.”
He says he’s staying in the stock market himself, but he is accepting a smaller return on his investment, while protecting his money against possible losses.