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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (1289)	12/6/2000 8:50:50 AM
From: Hawkmoon	Respond to of 74559

when the Day of Realization arrives, generating no bids. I think the "no bids" scenario is what we just went through with this election turmoil. But good points with regard to those 125% home equity loans and credit cards... However, with regard to real estate in some areas the trend certainly tends to be to higher prices, especially in the DC metro area. The fact that there has been insufficient supply to meet demand, and whatever building that has gone on has to meet "smart growth" qualifications (building within existing infrastructure), some folks here are seeing 30% appreciation of their real estate assets. And the guys I talk to tell me that EVEN in a recession, real estate prices will climb in this area. But again, these kinds of valuations are indicative of too much retirement money chasing too few assets, or only those assets with sufficient liquidity. The average retirement dollar is unable to be properly deployed in a diversified manner. Although you can hold real estate in your IRA, most IRA managers have no idea how to do it, nor are willing to. So little of the retirement dollar goes to that area. And even in current pension plans, most people have little choice as to where they can deploy their retirement dollars. They are able to only hold bond funds, govt bond funds, S&P500, aggressive growth..etc, etc. There really don't have much selection except in the already highly valued big caps. Again, this is a distortion in the marketplace, where money can't easily find it's way to the value stocks. This is evidenced by the fact that some 75% of the NYSE has been in a long-term bear market for the past two years, trading below its 200 DMA.. Maybe breaking down below Nasdaq 3000 is what was required to force money to redeploy into mid-caps and other areas. It hasn't yet broken the back of the Nasdaq big caps, but it has certainly ruptured a couple of discs which will require time to properly heal... :0) Regards, Ron