This past week all eyes were on the Federal Reserve’s meeting once again. The anticipation has been around their announcement to see if they were going to hold or lower rates.

To me it’s kind of funny…(and disgusting), that getting the Fed chair a microphone causes such drastic changes in the market.

So today, I want to share an insightful story about one of the most successful investors of our time, Stanley Druckenmiller. He was most known for his impressive track record as a hedge fund manager, Druckenmiller’s investment journey offers valuable lessons for all of us. One particularly enlightening experience was his realization of the Federal Reserve’s impact on the markets, overshadowing even the most sophisticated technical analysis.

In the early days of his career, Druckenmiller, like many traders, heavily relied on technical analysis. He meticulously studied price charts, patterns, and trends, believing these were the keys to market success. However, one day when he took all of this research and analysis to his mentor a pivotal moment came when his mentor threw his research across the desk and said, “that’s great but now go tell me what the Federal Reserve’s monetary policies are and where they are going, that’s all that matters here.”

Druckenmiller looked deeper into this and noticed that despite what technical analysis might suggest, the market often moved in direct response to the Fed’s decisions. Interest rate changes, announcements about quantitative easing, and other monetary policies had profound and sometimes immediate impacts on market behavior. This was a game-changer for him. He realized that to truly understand and predict market movements, one needed to pay close attention to the actions and signals of the Federal Reserve.

This epiphany led Druckenmiller to adjust his strategy. He began incorporating macroeconomic analysis into his investment approach, carefully monitoring the Fed’s policies and statements. This shift in perspective significantly contributed to his success, allowing him to anticipate market movements more accurately than relying solely on technical analysis.

The lesson here is profound: while technical analysis remains a valuable tool, understanding the broader economic context and the influence of major institutions like the Federal Reserve is crucial. The market is not just a reflection of historical price movements but is also shaped by macroeconomic forces and policy decisions.

It also brings up the concern of how to really forecast the growth of your hard earned retirement funds. Are you leaving your retirement savings in the hands of the man/woman behind the microphone of the federal reserve?

This is one of the many reasons why those in retirement, or coming up on retirement are nervous about being able to spend what they want to spend in retirement.

If you are looking to take back control of your future, these next few months are going to be critical to establish a good structural foundation before election season ends.

I only ask that you don’t wait to see things start to crumble, before taking action, by then it could be too late.