Didn't know where to post this, so I figured I'd post it here. I'm in the mortgage business so I have access to market data expert subscriptions that many people do not have access to (or they don't care to). Mortgage interest rates are low right now (hovering around 5% on a 30 year fixed) but (without boring you with the details) it is inevitable that MUCH higher interest rates are in our future. Mark it down. Save this thread. Bump this thread later on in the year. I see a substantial increase coming. When the rates do go up....it will be the final nail in the coffin of the housing market and possibly the stock market (but great for prescious metals) and it will wipe out an enormous amount of capital in the bond market. And higher interest rates will bring on more corporate bankruptcies. I sincerely hope that I am wrong and an omniscient juggler in the White House can keep all of the balls in the air and end the show with a standing ovation...but the odds of that are extremely low. Just a little FYI for you homeowners out there.
I'm not sure, brother. I don't want to tell you the wrong thing. I'm more of a mortgage expert than anything. Off the record, I'd say precious metals. Alot of people think precious metals is for the "gloom and doom/the end is near" type of guy. In reality, what's really left after stocks, bonds and real estate collapse? Again, I don't feel comfortable giving you that kind of advice...but if you have any mortgage questions, let me know!:thumb:
The amount of people that redefault is going to be scary which is probably why we wont see many lenders participate.
Don't put ALL of your money ANYWHERE. Think Stanford, think Madoff--Diversification is rule one of investing. I've got my money in stocks, bonds, mutual funds, annuities, real estate, precious metals, and a lot in money markets right now, where they ain't earning me much, but they ain't losing me anything either.
I know that's good advice. I did what I did because my 401K was hemmorhaging. It was a stop gap but now it's time to do something else. I plan to retire in 2 years so I'm more interested in keeping what I have than watching it grow. I did increase by about 13K since September 30, but that includes my contributions and the company match.
I agree with CS that rates will go up at some point. 3.5% on 30 yr. treasury bond won't last. The 100 year average is probably between 5 and 6%. SF, where to go now? Do not sit in a long term or short term bond FUND. A fund has no maturity date, so when rates go up, and the bonds in the fund drop in value, you can't even hold until maturity and get all of your principal back. You may get it back, but it can take 5 - 10 years. In a rising interest rate environment, you must control your maturity date. I'd buy (I bought) some 2 - 3 year 100% FDIC insured CDs. The rate is poor, 3% is good, but it beats a MM. If rates go up, you won't have to wait too long to get your money back (you will get all of it, and you know the day when you will get all of it), and then you can re-invest it at the higher rate in 2 or 3 years. That's what I'm doing. For the little more adventurous, look into buying TBT, and exchange traded fund that shorts the 20 - 30 year treasury bonds, X2. So, if the long bond loses 1%, this makes 2%, AND VISA VERSA! Being an ETF, it trades just like a stock. Look it up in www.etfconnect.com . I have traded TBT a good bit since Dec. and always made money. If I screw up in the short run, I should get bailed out in the long run (2 or 3 years). I like having that backstop. Rates can stay low for a long time given how weak the economy is, but the 30 year bond will be higher than 3.5% at some time. I have some CDs and some TBT (more CDs). If you score with this, I'll pick up my 5 lbs. of boudin next time I go to La.!!! :grin:
I am closing today, locked in at 5 1/2 through the VA. I think I could have got it a little lower if I had went with FHA but didn't have the 11k to bring to closing so VA it is. I agree that many more foreclosures are coming and I might scoop up a few of those if I can catch em right then start flipping.
