bharatbhasha.com
Free Articles  >>  Business And Finance >>  Page 2201  >> 

2 Investment Bubbles Ready To Pop





Copyright (c) 2010 Brian Fricke

In the early 2000's, we had the technology bubble. More recently, we had the real estate bubble. Now, I see two new bubbles that may be developing - and may be putting your nest egg at risk. I'm talking about bonds and gold.

The reason I won't be surprised if there ends up being a bubble in bonds is that I just saw a statistic stating that year to date close to $150 billion dollars has gone into bond mutual funds. And in the same time period, over $50 billion dollars have been taken out of stock-oriented mutual funds. If my math is correct, that's about $100 billion dollars that has flown from money market accounts into bond mutual funds.

When you think about it, that's the herd mentality in action. After all, the real estate bubble was at its peak when it seemed like everybody was jumping into real estate, with "flip this house" and "preconstruction condos" and "flip the contract" and all that craziness. When I see a huge migration of money into a particular area, to me, that means a bubble may be forming. This could be the case with bonds.

Interest rates are at historical lows. Bonds go down in market value when interest rates go up. So if you've got money in a bond mutual fund, you need to be very aware of any increase in interest rates, because a raise in interest rates will cause the value of your bond mutual fund to go down.

Note that I'm not talking about individual bonds. When you hold those until maturity, you get your money back even if the value goes down. You just need to be careful about bond mutual funds and all the money that's flocking in to them. The question you want to ask yourself is "what's my exit strategy? How will I know when it's time to get out of my bond mutual fund?" Now is the time to develop your exit plan.

The other bubble that might be forming up is gold. If you haven't heard, gold just hit an all-time high. It crossed over $1,300. And that makes me kind of nervous. I'm not worried that gold can't or won't go higher, and I'm certainly not suggesting that the floor is getting ready to fall out from under gold. I'm just talking about being careful. Right now, when the media is saturated with advertisements to buy gold and nationally syndicated radio talk show hosts are peddling gold, I'm reminded, again, of the real estate bubble.

Remember all that advertising for "make money in real estate seminars" and home study courses and workshops? They were all over the place. But I haven't seen those kinds of advertisements lately, have you? That's how I feel when I see "sell your gold", and "we buy gold "and "get your gold coins" everywhere. When an investment is suddenly advertised all over the place, that suggests to me that maybe we're closer to the top in the cycle -- regardless of what the investment is.

My advice is simply to be careful and not put too much money in those areas. And if you're already in...make sure you have an exit strategy - know when it's time to get out and have a plan to do it.


About Author Brian Fricke :

Brian Fricke is the Author of "Worry Free Retirement, Do What You Want, When you Want, Where You Want".&nbsp; For the last 6 years in a row Brian and his company - Financial Management Concepts - have been named one of America's Top Wealth Managers.&nbsp; For more information, please visit <a href="http://www.BrianFricke.com" target="_blank">http://www.BrianFricke.com</a>


Article Source: https://www.bharatbhasha.com
Article Url: https://www.bharatbhasha.com/finance-and-business.php/272041


Article Added on Sunday, November 14, 2010
LD
Other Articles by Brian Fricke

Will The Uptrend In The US Stock Market Continue
? Copyright (c) 2010 Brian Fricke It seemed like the markets started off 2010 very similar to last year. Not quite as stressed out, but January and February were not, shall we say, stellar in terms of market performance. And then in March things came roaring back with a vengeance. So of course the big question now is, “Will the up trend continue?” It’s amazing what has transpired over the course of a year. We’ve gone from the deepest darkest days in recent market history to quite a...

Why You Should Own Your Own Home Free and Clear
Copyright (c) 2010 Brian Fricke From my experiences over the last couple of decades, I’ve observed that folks tend to have a less stressful and more worry free retirement when they don’t have the burden of debt in their life. Which is why I believe your ultimate goal should be to own your home free and clear at or before retirement. But occasionally, I get challenged on that concept on one of two fronts. The most common objection to paying off a mortgage that I hear is, “Wow, if I do that...

How Will The Korean Conflict Affect Your Money
? By now you've probably heard that North and South Korea started shooting at each other - which served as a reminder to me (and I hope you as well) that what we call the economy is no longer a US economy. It's a global economy, and it becomes more and more global every day. Soon after the Korean event, the Dow dropped 150 points in one day. But the irony is, the very next day, the market closed up 150 points. What that tells me at least in the near term; is that there hasn't been much of an...

How Much Of Your Money Is Going To Those Fat Cat Wall Street Bonuses
? Copyright (c) 2010 Brian Fricke We keep hearing stories about all those big Wall Street brokerage firms giving out multi-million dollar bonuses. I’ve even heard of a secretary getting a bonus of over $200,000! So how do you know if it’s happening to your money, and what can you do, if anything, to prevent it? The problem starts with where you’re getting your investment advice – especially if it’s from people that work for the Wall Street brokerage firms. You know, the Merrill Lynch’s, the...

How Much Money Can You Safely Withdraw From Your Investments
? Copyright (c) 2010 Brian Fricke It’s a common misconception — that in order to have enough money to get through the rest of your life, you want a withdrawal rate of no more than 4-6% of your investment account(s). Maybe you are following this so-called rule right now. I don’t argue with the science or research behind the 4-6% rule. However, when you apply it to the real world; I think it is just a little bit flawed. A 4-6% withdrawal rate is a “one-size-fits-all” solution – it doesn’t...

Does Your Broker Really Work For Free
? Copyright (c) 2010 Brian Fricke I can’t tell you, honestly, how many times I’ve heard someone say, “I’m not happy with my broker, but I don’t really pay him, so I can’t really be that upset.” And when I tell that person that while they might not see the money coming out of their account, they’re still paying the broker, the person almost invariably says, “Oh no, I don’t. I don’t pay them anything.” Then I show them their account statement, and we look at all the different mutual funds or...

The Single Biggest Money Mistake Couples Make
Copyright (c) 2010 Brian Fricke Years ago, I got a phone call from a gentleman, and the moment he called, I knew without a doubt something was wrong. How? Because this man had never taken an interest in his and his wife’s finances – he had delegated the job to her, and he never dealt with it. She and I would meet every two or three years. She never could quite bring herself to hire us to handle things for her; she preferred to run things on her own and was comfortable pulling the trigger on...

Asset Allocation Myths You Need To Avoid
Copyright (c) 2010 Brian Fricke Today, I want to take a closer look at mistakes that could cost you big money when it comes to your financial security and a worry free retirement. This might be a little controversial, and that's okay. My purpose here is to get you thinking, and maybe further review and evaluate your own situation. 1. Spreading your money around means a smoother ride. This seems to be a very popular philosophy or strategy held by just about everybody in the financial world....

Successful Investors All Have One Thing In Common
Copyright (c) 2010 Brian Fricke Successful investors have a system. They have rules that they follow and that they don't deviate from. Take Warren Buffett. In the 1990's, he did not get into the Internet companies. People thought he was nuts. And what happened? The Internet bubble popped. Now, Warren's back on top, well ahead of where he was back in the 1990's when he seemed like the only person not making money on the Internet. When I ask folks about their stock, When do you know when to...

Should You Listen To The Economic Experts
Should You Listen To The Economic “Experts?” Copyright (c) 2010 Brian Fricke I am a financial expert. People turn to me for advice. But I will be the first to tell you I certainly have no way of knowing what’s next in terms of where the market is headed in the near future. And I want to remind you to avoid anyone who says or thinks they do. Everybody’s got an opinion. Everybody can back it up with all kinds of research. But at the end of the day, remember that if somebody really knew what...

Click here to see More Articles by Brian Fricke
Publishers / Webmasters
Article ID: 272041
DELINK URL from Authors Bio
REMOVE Article
Tell A Friend
Leave A Comment!
Download this article in PDF
Report Article!
Search through all the articles:


213 Users Online!!
Related Articles:
Latest Articles:
 
Business And Finance >> Top 50 Articles on Business And Finance
Category - >
Advertising Advice Affiliate Programs Automobiles
Be Your Own Mentor Careers Communication Consumers
CopyWriting Crime Domain Names DoT com Entrepreneur Corner
Ebooks Ecommerce Education Email
Entertainment Environment Family Finance And Business
Food & Drink Gardening Health & Fitness Hobbies
Home Business Home Improvement Humour House Holds
Internet And Computers Kiddos and Teens Legal Matters Mail Order
Management Marketing Marriage MetaPhysical
Motivational MultiMedia Multi Level Marketing NewsLetters
Pets Psychology Religion Parenting
Politics Sales Science Search Engine Optimization
Site Promotion Sports Technology Travel
Web Development Web Hosting WeightLoss Women's Corner
Writing Miscellaneous Articles Real Estate Arts And Crafts
Aging


Disclaimer: The information presented and opinions expressed in the articles are those of the authors
and do not necessarily represent the views of bharatbhasha.com and/or its owners.


Copyright © AwareINDIA. All rights reserved || Privacy Policy || Terms Of Use || Author Guidelines || Free Articles
FAQs Link To Us || Submit An Article || Free Downloads|| Contact Us || Site Map  || Advertise with Us ||
Click here for Special webhosting packages for visitors of this website only!
Vastu Shastra

Business eMail Provided By AwareIndia







Company IDS