Quote:we are a couple years away from this, but I completely agree.
It's already happening with banks and lending institutions offering loans that people can't really afford for real estate. As an example, my sister and her husband recently bought a home in Colorado Springs. When they applied for a mortgage they were told that they were approved for up to an $800,000.00 mortgage. My sister told me "we have no business even considering an $800k mortgage. Why did they offer that to us?" While her and her husband do make pretty good money and have other assets, she's right.
Quote:It's already happening with banks and lending institutions offering loans that people can't really afford for real estate. As an example, my sister and her husband recently bought a home in Colorado Springs. When they applied for a mortgage they were told that they were approved for up to an $800,000.00 mortgage. My sister told me "we have no business even considering an $800k mortgage. Why did they offer that to us?" While her and her husband do make pretty good money and have other assets, she's right.
Glad your sister has her wits about her.
Just because it is offered doesn't mean you should take it.
It isn't the government's job to make sure I make smart decisions, IMO.
Quote:It's already happening with banks and lending institutions offering loans that people can't really afford for real estate. As an example, my sister and her husband recently bought a home in Colorado Springs. When they applied for a mortgage they were told that they were approved for up to an $800,000.00 mortgage. My sister told me "we have no business even considering an $800k mortgage. Why did they offer that to us?" While her and her husband do make pretty good money and have other assets, she's right.
yup thats one of the first stages, it tends to take a couple years for that to add up. Property values haven't gone up exponentially the same way... yet it will and is starting to happen.
Quote:Questions .... assuming most of you are middle aged.
Are you getting more aggressive with your 401k investment (e.g. diversifying) ? The reason I ask is because I went into protective mode when the Dow hit 18,500 because we're comfortable to date but in a way I feel like I'm not taking full advantage of the bull market.
Are you thinking of investing in anything this year (e.g. Oil Stocks or other stocks, Housing, etc.) ?
I went aggressive the day before Trump took office. So far so good!
Quote:You can buy anytime - NEVER try to time the market.
Best advice is to not over-think it and never buy single stocks. Here's how:
<a class="bbc_url" href='http://www.daveramsey.com/blog/how-to-invest-in-right-mix-mutual-funds'>http://www.daveramsey.com/blog/how-to-invest-in-right-mix-mutual-funds</a>
Change the mix based on how long the money will be in the market. As you age and get closer to drawing, your mix should change to more conservative.
You should absolutely buy single stocks when they are undervalued. Going to get a lot richer that way. I'd say funds are good investment for those that don't really know what they are doing though or lacking capital to diversify.
Quote:You should absolutely buy single stocks when they are undervalued. Going to get a lot richer that way. I'd say funds are good investment for those that don't really know what they are doing though or lacking capital to diversify.
Investing all of your money in a handful of stocks is a terrible idea no matter which way you put it. You need to diversify if you want to build wealth in the long term.
Quote:Investing all of your money in a handful of stocks is a terrible idea no matter which way you put it. You need to diversify if you want to build wealth in the long term.
Well exactly. But you can diversify with single stocks you don't need a fund. It's very conservative to only buy funds particularly if young. You will never get a quick multibagger in a fund.
I think a fund as part of your portfolio can be a good thing though.
Quote:You should absolutely buy single stocks when they are undervalued. Going to get a lot richer that way. I'd say funds are good investment for those that don't really know what they are doing though or lacking capital to diversify.
And exactly how do you figure out they are undervalued when Goldman Sachs hasn't figured it out?
You see, it makes no sense to think you can outsmart the big money. The big money is all over this stuff. And once the big money figures it out, and makes their move, there's no money left to make the stock move up.
Quote:Well exactly. But you can diversify with single stocks you don't need a fund. It's very conservative to only buy funds particularly if young. You will never get a quick multibagger in a fund.
I think a fund as part of your portfolio can be a good thing though.
Mutual funds absolutely suck when they charge management fees. A 1% management fee will eat away at your returns over a period of time and you will lag behind the market. But they will send you all sorts of propaganda about what they're doing, and how they're so much smarter than everyone else.
Unless you are very intelligent and are willing to spend all day every day working at your investments, the smartest thing to do is buy the whole market with an index fund. Then go play golf and don't worry about it.
Quote:And exactly how do you figure out they are undervalued when Goldman Sachs hasn't figured it out?
You see, it makes no sense to think you can outsmart the big money. The big money is all over this stuff. And once the big money figures it out, and makes their move, there's no money left to make the stock move up.
Yes you pay for good quality stocks paying good dividends at a decent yield with a longer term outlook. You will never out trade the big money I agree.
Quote:21k and going...
Not really... yet. Stocks ended up pretty much flat today and I don't expect a lot of upward movement this month. The Fed (Janet Yeldon) signaled another rise in interest rates. The question is, how much of a rate increase? My bet is that it's going to be a .25% increase at the most. The market is due for a correction, and we'll probably see that. Overall the stock market is going to dip down slightly, then resume the upward climb.
What does that mean for the average consumer? Well, interest rates on new mortgages will be slightly higher as well as the interest rate on large purchases such as a new vehicle. Right now at my credit union a loan on a new automobile could be had for as little as 1.79%. Expect that number to jump up to around 2% shortly. The same could be said about mortgage loan rates. Right now at my credit union the rate is around 4.5%, expect that to go up to around 5%.
While small percentage points probably don't mean a lot to the average person, it is pretty significant when buying a home or making a larger purchase such as a vehicle.
On the "flip side" for savers, it also means that you will earn just a little bit more in your money market or savings accounts. My current money market account only pays
.50% on my money. that should move up a bit higher and give me a slightly better return.
So to recap, it's going to cost you more to borrow money for a new house or a new vehicle. Some people call this a "recession". Yet, if you actually save money and/or invest it you will earn a better yield.
Quote:Not really... yet. Stocks ended up pretty much flat today and I don't expect a lot of upward movement this month. The Fed (Janet Yeldon) signaled another rise in interest rates. The question is, how much of a rate increase? My bet is that it's going to be a .25% increase at the most. The market is due for a correction, and we'll probably see that. Overall the stock market is going to dip down slightly, then resume the upward climb.
What does that mean for the average consumer? Well, interest rates on new mortgages will be slightly higher as well as the interest rate on large purchases such as a new vehicle. Right now at my credit union a loan on a new automobile could be had for as little as 1.79%. Expect that number to jump up to around 2% shortly. The same could be said about mortgage loan rates. Right now at my credit union the rate is around 4.5%, expect that to go up to around 5%.
While small percentage points probably don't mean a lot to the average person, it is pretty significant when buying a home or making a larger purchase such as a vehicle.
On the "flip side" for savers, it also means that you will earn just a little bit more in your money market or savings accounts. My current money market account only pays .50% on my money. that should move up a bit higher and give me a slightly better return.
So to recap, it's going to cost you more to borrow money for a new house or a new vehicle. Some people call this a "recession". Yet, if you actually save money and/or invest it you will earn a better yield.
-shrug- it hit 21k when I posted...
its currently at 21k
but yeah.. seems to have stalled out there.
My 401k is doing veeerry well though lol
and I'm OK with rates going up. It's progress.
People want more money for nothing but want everything to stay cheap... haha... what world do they live on?