Personally, I think the Fed should have raised the Fed Funds rate last week. But what is done is done. I know there are a bunch of people who would disagree with that, but hey, we live where we do and you can believe what you want. Inflation, not the artificial and mass-produced hedonically generated numbers but real inflation, what we see and feel every day, has been around us for a while. How the Fed missed it is beyond me. I don't know about anyone else, but my inflation expectations are already shot to hell. Forget "its coming" - its already moved in and taken your side of the bed.
I foresee lowering of the FF rate in 6 - 9 months. That's just my own personal expectations. This is why I have rebalanced my portfolio to shift some money around into the generally weaker allocations. The 10 - 15% of my portfolio that is in bonds should experience a nice little boost once the cuts start.
But thinking a little further out, I can't help but see doom coming for the dollar. (Hell, its probably already here.) I won't belabor a point already made by many commentators but if you don't have a fair amount of money in non-dollar denominated assets, you're taking a huge risk with your portfolio. I think the dollar is on borrowed time overall. In the shorter term, grab your yield where you can. The big themes appear to be natural resources and foreign stocks, especially natural resource based economies.
Next time, I'll throw out my asset allocations and the logic behind them. Mind you, its not investment advice, just letting folks know what personally works for me. I have no problems sleeping with 30% of my funds in small caps. YMMV.