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When "Mr Market" misleads

To see this, think about the market's opinion about the Federal Reserve's decision on whether or not to reduce the pace of quantitative easing. This raises two problems.

One is that the Fed's decision is potentially ambiguous for shares. For example, a decision to continue QE might, in theory, be bad for the market; if the Fed believes the economy is so weak that it needs big policy support, equity investors should worry. Or it might be good: printing money supports share prices.

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