Fuss For Nothing

The long awaited non-event took place and the Fed ..... did not raise rates. 
Though we were prepared and domestic situation was comfortable enough to take it, Fed's decision in a globally troubled world with continued commodity deflation seems fair. (IMF warning seems to have played a big role)

Lets not comment on how will markets react from here, because while zero rates are a positive, markets have already rallied quite a bit from recent lows. Let's talk about how this decision will affect your investments and what should you buy, sell or hold:

What's good: 

- Threat to Housing & Auto sectors has now waned, or let's say delayed. These sectors will continue to build up on strong domestic secular trends.
- With deflation forecasted to continue, retail and restaurants will continue to benefit of macro tailwinds.
- $ will stabilize here and that won't help crude. After a quick run from 30s, crude could take a breather or retract. But that could push transports up, especially airlines.
- Lastly, the risk appetite of fund houses will go up again - pushing the (valuations of) hottest sector : Biotechnology up.

What I'm doing:
I'll be a buyer of Housing-themed stocks (LOW, HD, RH, ITB), Select retail (TGT, KR), Select Restaurants (CAKE,JACK), Airlines (LUV, DAL, RCL) & Biotechs on dips (CELG,AMGN,IBB)

What's bad:
 
- The obvious one, Financials: Banks will have to wait longer to see the rates go up, and even if they do - they will be gradual - unless the inflation shoots up. There seems no immediate respite for banks.
- Energy stocks (due to reason mentioned above).
- China-themed stocks: The major reason Ms. Yellen cited for the wait was "global" fears. We know that primarily points to China. If the Fed (Best economists in town) is uncertain of what exactly is brewing in China, why should we try to be smarter?

What I'm doing:
I'll be avoiding financials, energy and multinationals with huge Chinese exposure.  

Closing: 

I personally would've been okay with a rate hike, if it was accompanied with a strongly dovish tone and a picture of continued domestic strength. I'll take this decision, but then again - it adds more uncertainty on global growth, China deceleration and coming October, December & March meetings. 
All put together, volatility might not go away soon (some analysts expected everything to be okay if Fed doesn't raise). Thus, rather than trading the markets, I'll be focusing on re-shuffling my portfolio on every swing: Adding quality buys over "fair" companies I hold, adding sectors which have macro tailwinds rather than ones with global exposure and slowing growth.That's what the markets churns are for. 


Caching!