A single Federal Reserve meeting can spark major market swings. But for many investors, the bigger question isn’t “What happens next?”—it’s “How do I prepare for any outcome?”
“So, what do you think is going to happen after the FOMC meeting?”
Key Takeaways:
- The question about the post-FOMC outcome is often misguided
- Long-term investors treat short-term market moves as noise
- Short-term traders need adaptable strategies, not predictions
- Risk management should always precede new opportunities
- Decision-making is about fitting the event to your personal strategy
Why the Common FOMC Question Is Misguided
Every time the Federal Reserve meets, countless voices ask, “What do you think is going to happen to the market?” It’s natural—markets can shift dramatically when the Fed chair takes the podium. Yet for many investors and traders, this focus on predicting a single event misses the point: planning beats guessing every time.
Long-Term Investors: FOMC as Noise
For those holding quality stocks over a five-year horizon, tomorrow’s volatility barely matters. If an investor believes in the long-term fundamentals of a company, a short-term market dip won’t disrupt the broader investment thesis. As the article points out, “If you’re holding quality companies for the next five years, tomorrow’s FOMC volatility is noise.”
Short-Term Traders: A Plan, Not a Prediction
For active traders, the FOMC carries significance, but predictions alone won’t suffice. The article explains that what truly matters is whether you have a plan in place: “What will I do if the market spikes? If it dumps? If it barely moves?” By framing possible outcomes and preparing for each, short-term traders can navigate post-announcement swings more effectively.
Decisions Over Predictions
Market history is full of reminders that “Markets punish overconfidence.” Even the most accurate guess can crumble if you haven’t managed risk. A simple example is trimming part of a winning position before a key announcement: if the market soars, you benefit from the remaining stake; if it slides, you’ve locked in some profits. The point is not to chase perfect guesses, but to make decisions that hold up regardless of surprises.
Risk First, Opportunity Second
Major events like the FOMC act as volatility triggers, not lottery tickets. The article stresses that smart investors first ask about the worst-case scenario: “How will I respond if it happens?” By preparing for potential downside, you position yourself wisely for any subsequent opportunities. Only after shoring up risk does it make sense to seek new openings once the market settles.
Ask the Right Question
When tomorrow’s Fed meeting looms, the real question is less about predicting outcomes and more about understanding your own objectives. Long-term holders can remain steady, while short-term traders must have a plan for spikes, dips, or the status quo. As the article concludes, “So what will happen after the FOMC meeting tomorrow? Who knows, who cares. What matters is why you’re asking.”