What Happens to Stocks When the Fed Bids Farewell?

Last week, the Federal Reserve reassured investors that it will keep its foot on the monetary gas pedal. This is good news for stocks -- for the time being.

But what happens when the Fed decides to let up, reining in its super-loose money policies of the last five years?

investors naturally fear a big market pullback. And that may be what occurs. But in this video, Fool analysts Morgan Housel and Austin Smith discuss the other side of the story and why an end to easy money doesn't necessarily mean the end of stocks.

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

The article What Happens to Stocks When the Fed Bids Farewell? originally appeared on Fool.com.

Fool contributor Morgan Housel owns shares of Altria Group, Procter & Gamble, and Philip Morris International. Austin Smith owns shares of Philip Morris International and Colgate-Palmolive. The Motley Fool recommends Procter & Gamble. The Motley Fool owns shares of Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.