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Strategies & Market Trends : Ride the Tiger with CD

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To: Rocket Red who wrote (133459)10/7/2008 10:14:53 PM
From: Rarebird  Read Replies (1) of 314064
 
If you listen to the media, virtually the entire focus is on how much more equities can decline. That's typical when things reach an extreme and is a contrary indicator. Many people, globally speaking, have put money into money markets which are yielding more than the inflation rate in many countries. As short-term interest rates continue to be cut, these money markets will pay progressively lower returns, which will soon be less than the inflation rate.

With a negative real rate of return, investors will initially seek out equities, and eventually also commodities, as viable alternatives to money markets and bonds.

We are much closer to a bottom, intermediate term, than you think.
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