You can’t say that the central banks aren’t doing everything they can to boost the economy and financial markets. This week, the highlight was the Federal Reserve’s announcement of a third round of quantitative easing, better known as QE3. The Fed will buy $40 billion a month in mortgage-backed securities, which will hypothetically bring down mortgage rates, and put more money in bank’s hands and, eventually, end up in the economy.
So far, the market thinks it’s a good idea. The Dow Jones Industrial Average
Financial stocks led the charge again this week. Bank of America
The other big mover this week was commodities and companies that rely on construction for demand. Alcoa
Sometimes, markets forget that there’s a reason QE3 was implemented in the first place. Economic conditions are anything but strong, and last week’s bond purchase announcement by the ECB was out of downright necessity to keep Europe from falling apart. I would stick to stocks that are improving fundamentally, not just rising on speculation of an economic recovery, like many stocks are doing this week.
Steady stocks often come with dividends, and we’ve identified not one, not two, but nine stocks that are paying rock-solid dividends. These stocks are revealed in our free report, which can only be found when you click here.
Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
The Motley Fool owns shares of Bank of America and JPMorgan Chase. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.