Yesterday's morning news cheered the rise in the NYSE. Hooray! they shouted, the market experienced its highest rise in 6 years. Consumer confidence was said to be up as well. Hooray! Hoorah! Ha-hooey!
Underneath the banter a reason for the market increase was whispered. Investors are pulling out of hedge funds. The pull-out amounts to $15.3 BILLION during the first two months of 2016. A significant amount of money which investors have to put somewhere. Hence, the market rise. A move not motivated by confidence, but rather a method of cost-cutting. Hedge funds command sizable fees for the service they provide. What puzzles me is how investors who have depended on the astute maneuvering of the hedge fund managers think they can out maneuver the masters of the game. Sounds to me like Monique has donned a new pair of earrings and a fresh lipstick and taken to walking the streets again.
Stocks may have rebounded, but as today's morning news reported, the US markets closed down yesterday, way down. Market volatility has insightful investors hedging their bets. The smart money is on a market collapse. As the market goes, so goes the dollar.
Another bellwether of times to come, of course, comes from banks and mortgage lenders. New mortgage activity is down, so the push is on for equity loans. The banks want people to start taking cash out of their homes for home improvements. Property values are increasing (possibly because the inventory is stalemated?) and the banks want to stake their claim. Home improvements do indeed create jobs and increase sales of manufactured products, but shouldn't $119,790 as an average line of home equity loans make us the tiniest bit nervous in light of the increased betting on a market collapse? The key lesson from RICH DAD, POOR DAD is that a house is not an asset unless it brings more money in than takes out. I tell you, that hog Monique really gets around.
RICH DAD author Richard Kiyosaki, Bo Polny, Mike Malloy and others strongly recommend converting cash into precious metals like gold and silver. Gold is real money. Goods and services have been purchased with gold in every century in every culture, in ever country of the world. Another recommended solid asset include farmland. However, for city dwellers like myself, gold in small spendable amounts of 1g. to 5 g. is far more practical.
As you can imagine for obvious reasons, Monique won't go near farmland. Gold and silver makes her lips break out and swell. Not a good look for a pig without a kaleidoscope.
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