Bad news is good news again.

It was just a couple of weeks ago that the markets were in turmoil over the emerging market issues. Currency spreads widened, stocks fell, and bond prices surged. Then, seemingly almost overnight, the world returned back to its overly complacent normality of the past year. The question that we have to ask is – why?

The primary reason can be directly attributed to Janet Yellen. As Yellen addressed Congress last week, she made it clear  that she will not depart from Bernanke's preset course and “it will likely reduce the pace of asset purchases in  further measured steps  at future meetings, although purchases are not on a  preset course”. With the threat of a more aggressive "tapering" removed, risk appetite resurged and the markets’ path were cleared for a rally. There are times that markets can behave irrationally. This is particularly the case when there are artificial interventions into the market. With the Federal Reserve still currently pumping $65 billion a month into the financial markets, investors chose to ignore flood of weaker US and international data and continued its appetite for risky asset classes.

Current market conditions are extremely complex and it is advised that non-professional investors must stay aside and do not jump into the speculative assets at current valuations. Conservative investment portfolio of some cash, gold and bond would be sound choice for risk averse investors for a good night sleep. Those who like taking some risk may add income generating utility stocks to their portfolio.