Are things that good?

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Apr 5, 2006 11:27 pm

I do understand the war and govenment is pumping in gooogilllion'$ of dollars.. Employment is up to 95%+.. 70% owns homes... Inflation is in check... Markets are at 5 year highs... People are buying and they are not saving.. 


Are we in a BOOM? Feels a bit like 2000. Everything is going up...


On the other side house devaluation... Interest rates.. Oil, energy and metals are up.. The wealthy are wealthier and the poor are poorer... 

Any economists here? I thought rates go up and market gets a check up? I guess the rates are still so low that it really does not matter, YET? Is there a lagging indicator.


Can't fall asleep thinking about this crap.. Thinking if things turn (economic cycle) how will that effect new RR's. For sure the googlian'$ from baby boomers retiring and selling their home will be there....  Any feedback is appreciated..

Apr 6, 2006 7:35 am

Don't be fooled by the low savings rate. Nobody wants to keep money at a

bank. Instead, they're investing in real estate and the stock market. Yes the

rate of leverage is high, but we are after all, a paper economy.



Nearly 28% of homes bought last year were for investment purposes, and an

additional 12% were vacation homes, the figures show. Most of the buyers

were baby boomers in their top earning years, looking toward retirement

and hoping to build wealth or find a more desirable place to live.



In India, citizens are buying gold bullion as a savings vehicle.

Apr 6, 2006 7:52 am

I love this post.  The market has been running here for a while
now but it cannot sustain, and this has happened a few times in my
career.  I love it, not so much for the upside, but for the
opportunity to call a correction...and be right in your clients
eyes.  We need to see a brief market correction, and will get one
between 10 and 20 percent this year, just watch. 



Its good though, we need it.  You, and everyone else, will feel
better once this happens.  New RR?  Position your existing
clients for it now not by making changes to the portfolio, but rather
by discussing the event. 



You will get responses like "should we go to cash then?"  and you answer is; "of
course not.  Timing it is impossible, and we may be wrong here,
but if it occurs it will be a window to exploit the market and
accumulate market share.  Its normal and its healthy, but very few
profit from downturns because they don't see them for what they
are.  Follow our direction in 2006 and you will be very
happy."   Have that be your mantra, and when it occurs, which it will, the response from your clients will surprise you.  

Apr 6, 2006 2:06 pm

Interesting to hear everyone state how much they lost in 2000... But all forget the amount they gained before and after. I know people who were 90% tech were hammered, but if they held they are doing well.


Today I actually told a few people its easy to pick winners in this market, but if/when there is a correction its not as easy. Many TSP'ers are cruising on the net adjusting their portfolios daily.


One guy has a model where he moves to growth after down day and to income after a up day/s.   Rather interesting. This guy was so excited and could not stop talking about making money.. Like gambling.

Apr 6, 2006 7:57 pm

I always try to keep in mind that my job is to manage the expectations of my clients.

Apr 6, 2006 9:32 pm
7GOD63:

Interesting to hear everyone state how much they lost in 2000... But all forget the amount they gained before and after. I know people who were 90% tech were hammered, but if they held they are doing well.


Today I actually told a few people its easy to pick winners in this market, but if/when there is a correction its not as easy. Many TSP'ers are cruising on the net adjusting their portfolios daily.


One guy has a model where he moves to growth after down day and to income after a up day/s.   Rather interesting. This guy was so excited and could not stop talking about making money.. Like gambling.

Apr 6, 2006 9:33 pm

He needs to be careful. Only so many Wal-Mart greeter jobs.