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Old 04-10-2012, 07:28 PM   #21
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Originally Posted by Big Game James View Post
Leveraging can be a good thing and it can kick you in the teeth. Personally if you have a good amount of liquidity I'd consider an emerging market. We've all seen what different market sects in China have done and if we haven't would probably hang ourselves when we see what they've made compared to our economy. You have to remember they actually took the torch from us and are running with it. If you didn't already know, I'll have to look at it again - but a few years ago they owned 4X more of our 10yr bond than we did - yes... The same 10yr bond that influences our credit rates and social security. They bought us when we were extremely cheap - although now we're much cheaper with our non-standardized money and our good friend inflation...
Speaking of that emerging market did you know that if you're native Chinese you can walk into any government building and buy silver @ spot!!! at spot!!! They're literally helping people leverage themselves against the mistakes we've made with our money. And yes I understand that Silver has taken some swings.. but compared to a non-collateralized dollar , I'll take the silver any day..

I don't know if you watch Jim Cramer, but a few years ago he was put under a huge fire and all the videos regarding it has been taken off you tube because someone called in and asked about how to make the most profit and not have to deal with the hoopla that's going on in the market right now... He was put under fire because of all the companies that sponsor the show and gave a huge public apology because of what he said and I cant remember the exact words but it was something like this-
If you really want to make money and not have to deal with all the stuff going on here in the US then for the next 5 years invest your money abroad..

CD's in my personal opinion are a poor option for 2 reasons:
1. they don't out pace inflation
2. if they do the tax you pay on them takes you right back under the pace of inflation

so when you look at it the dollar amounts are going up but your financial power is going down. Saving to go poor.. =(

On a really good note though... I know that there's going to be an apex in the RE market directly... it's not going to be anything ridiculous like we just experienced, slow if anything but an awesome opportunity to go long on some assets.

When the rates start to come back up the cost of living will act as a fulcrum to drive the price of the homes down. if you're liquid enough this would be an awesome time to pick up some depreciated assets. I personally know of someone who did this in the 90's (on the flat side of the swing after the late 80's crash) with two 20unit complexes and has been living pretty crisp ever since.. The cool thing is that he did it on the flat side (premature) and even then he's doing pretty well.. He hasn't needed to make a single investment since.. pretty humble guy - I would keep the money train moving and do something cool with it like feed the needy or create financial education programs but that's just me.. =) Good luck with your investing.. I hope you find what works best for you..
Thanks Big Game James...
I've seen those emerging market YTD returns for last year and this year. Had some in emerging markets but not nearly enough. I remember when Jim Cramer said "move your money abroad".
That APEX you mentioned may very well happen shortly....

CPI was 3.2% last year are right...with CD rates as they are is loosing money. The CD's I have were invested in 2007 and anywhere from 4% to 5.5%. I remember feeling hesitant to lock it in for that amount of time....thinking surely...this will be better in 4, 6 and 7 years. Nope.

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Old 04-10-2012, 07:44 PM   #22
Thinks s/he gets paid by the post
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Originally Posted by Hamlet View Post
Regardless of what Bernake says or does, if the economy sharply improves we have the potential of seeing rates spike pretty quickly.

Remember, he only actually sets short term rates. If long term rates move against these REITs, you could see massive downside in their prices.

I have no idea how likely a large loss is, but it isn't tiny.

Are you ok with a 15% percent chance of a six-figure loss?
Good point Hamlet...about the long term rates moving against.

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