About two hours into trading, Wells Fargo (NYSE: WFC ) is just managing to keep its head above water, up 0.49% so far. Don't expect much more today -- or even the rest of the week -- from Warren Buffet's favorite bank, or any of its Big Four peers: Fed-watch is in full swing.
Meeting room with a view
The Federal Reserve's Open Market Committee opens its regularly scheduled two-day meeting today. The FOMC is the policy-setting body of the Fed.
Potentially at stake is the fate of quantitative easing, the massive monthly bond-purchasing program begun by the Fed in September of last year, and what many believe to be the driver behind America's nascent economic recovery. With unemployment dropping slowly but seemingly steadily, and GDP growth solid if not stellar, there's talk that chairman Bernanke might begin tapering QE back.
Hang on tight
And this is making investors nervous. Good economic news, normally a market driver, can become a market syphon as it points uncomfortably to the end of QE. But QE has to end sometime; it's been a necessary crutch, but the central bank can't expand its balance sheet at the rate of $85 billion per month forever.
Whatever comes out of the FOMC meeting minutes, it's more important for investors to focus on the fundamentals of the companies they're invested in. And for Wells Fargo investors, those fundamentals are about as strong as anyone could possibly like. To borrow a phrase from JPMorgan Chase CEO Jamie Dimon, Wells has a fortress balance sheet. It also had a strong first quarter and a return-on-equity of 13.07% trailing 12 months, reflecting the bank's excellent management.
Wells stock, like that of its Big Four peers, is going to be in choppy waters over the next few days, and it will move up and down accordingly. Don't worry about it. As an investment, you can't do much better than Wells. Take the long-term view of investing, which is what we here at The Motley Fool counsel every day, not just when the FOMC is meeting. And leave the obsessive ticker checking to the day traders: Your portfolio will thank you, even if your broker won't.
Looking for in-depth analysis on Wells Fargo?
Wells Fargo's dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains? To help figure out whether Wells Fargo is a buy today, check out this premium research report from one of The Motley Fool's top banking analysts. For instant access, simply click here now.