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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: jackjc who wrote (34917)	6/28/2005 3:42:05 AM
From: Elroy Jetson	Read Replies (2) \| Respond to of 110194

A record amount of wealth will be lost as a result of the current credit-bubble induced real estate boom. Home owners will lose their retirement, life savings, and security, along with the many jobs which have been generated by the current credit-bubbble. Even though a large portion of the Federal budget is dedicated to providing real estate subsidies, the return on real estate investments are plumbing new depths. Your savings and retirement plan are being invested in over-priced real estate even while you sleep. Our already over-indebted government will be on the hook to bail out the real estate induced banking implosion. Taxpayers will be saddled with paying for the catastrophe for generations. Of course now is the time to be in a liquid position with those funds you can control. .

To: jackjc who wrote (34917)	6/28/2005 8:11:39 AM
From: Wyätt Gwyön	Respond to of 110194

you are simply pointing out that most people are bad investors. for this reason they typically underperform the market. that is the fault of investors, not the market. you are wrong if you think RE is a better investment than stocks from a merits standpoint. RE has exhibited less than half a percent of real growth annually over long periods like a century. by contrast, the stock market has appreciated at close to 7% reak annually. thus, there is no question that stocks have killed RE many times over in terms of being better investments. now, of course, RE in the bubblezones is set to have a real return of perhaps negative 50-70%, whether that takes one year or three decades. meanwhile stocks will perhaps return 0-2% real annually. they cannot return their historical 7% real since most profits are siphoned off to insiders through options. 0% real from stocks is not a good absolute return, but relatively it is considerably better than negative 70% real from RE. in fact, stocks could be set for a decade of large outperformance over RE, even if stocks fall, simply because RE needs to fall so much farther.