Are you trying to figure out what to invest in this year? Well Toni Straka from Prudent Investor, knows what his investment portfolio will be made up of in 2011. Read the following post to learn more about Straka's strategies and predictions for the new year.
BONDS: The 20-year interest rate downtrend reversed in 4Q10: Short all government bonds (and hope your counter party will remain solvent.)
Rising rates will become the tightening noose for all debtors. Mortgage holders may find comfort by switching to fixed rate contracts as far out as possible.
SHARES: As inflation heats up, go long energy, food stocks (and convert ensuing profits into gold.) Underweight consumer (durables) products in a cool economic environment, short debt-laden financials, especially the "dumb money" insurance sector.
DERIVATIVES: Stay away from all OTC instruments as your contract will ultimately only be worth as much as your counter party can pay. Square all derivatives in disguise like ETFs.
COMMODITIES: Buy silver as it is still 70% away from its nominal high seen in 1980 and has a dual use as money and industrial resource. Take profits once gold:silver ratio has descended to 1:30 and reenter after technical consolidation. All other commodities have reversed and have overshot the mean by now.
CURRENCIES: Buy the real stuff - gold. All other fiat currencies are just a claim on some central bank counter party and historically they have all wrecked their product via inflation in the last 300 years.
Once you have done this handful of trades, turn off the charts, lean back, contemplate the world and check back here in January 2012.
This post was republished with permission from The Prudent Investor.
Showing posts with label mortgage. Show all posts
Showing posts with label mortgage. Show all posts
Monday, January 17, 2011
Tuesday, July 14, 2009
Downpayment Requirements Stifles Demand
According to a survey by the National Association of Realtors, the number one factor discouraging first time home buyers is the downpayment requirements asked for by most lenders. Downpayment requirements were too high for 82% of survey respondents. The following post from The Mortgage Roadmap, discusses how this is stifling demand in the market.
If you're a first-time homebuyer, there's probably one factor that's preventing you from buying a home: the downpayment.
It's always been a struggle for buyers to scrape together enough money for a downpayment. After all, homes aren't cheap. Who has $10,000 or more just lying around for a downpayment?
During the housing boom — which ran through a portion of 2006 — many lenders required borrowers to put down as little as 3 percent of a home's purchase price. Others didn't require any downpayment at all. This made life easier for borrowers, but helped push a slew of mortgage lenders into bankruptcy once the housing crash hit.
Today, lenders are more careful. Many of them are asking for higher downpayments. Some are asking for 20 percent down. It's a reason why so many potential homebuyers are now looking to obtain FHA financing: These loans only require a downpayment of 3-and-a-half percent.
Each year, the National Association of Realtors releases its National Housing Pulse Survey. It's always a fascinating read. This year's survey, for instance, revealed that coming up with a downpayment is is too much of an obstacle for 82 percent of today's homeowners.
The survey also revealed a home buying public that is terrified by the nation's weak economy. According to survey, two-thirds of U.S. residents consider job layoffs and unemployment as serious problems. A total of 80 percent of respondents pointed to them as serious impediments to buying a house.
It's a bit of a shame to see these numbers. Housing prices have dropped significantly from just one year ago. This means that housing is more affordable than ever. Unfortunately, at the same time, more U.S. residents are losing their jobs or seeing their annual income reduced. This sort of negates the benefits of increased housing affordability.
This article has been republished from The Mortgage Roadmap.
If you're a first-time homebuyer, there's probably one factor that's preventing you from buying a home: the downpayment.
It's always been a struggle for buyers to scrape together enough money for a downpayment. After all, homes aren't cheap. Who has $10,000 or more just lying around for a downpayment?
During the housing boom — which ran through a portion of 2006 — many lenders required borrowers to put down as little as 3 percent of a home's purchase price. Others didn't require any downpayment at all. This made life easier for borrowers, but helped push a slew of mortgage lenders into bankruptcy once the housing crash hit.
Today, lenders are more careful. Many of them are asking for higher downpayments. Some are asking for 20 percent down. It's a reason why so many potential homebuyers are now looking to obtain FHA financing: These loans only require a downpayment of 3-and-a-half percent.
Each year, the National Association of Realtors releases its National Housing Pulse Survey. It's always a fascinating read. This year's survey, for instance, revealed that coming up with a downpayment is is too much of an obstacle for 82 percent of today's homeowners.
The survey also revealed a home buying public that is terrified by the nation's weak economy. According to survey, two-thirds of U.S. residents consider job layoffs and unemployment as serious problems. A total of 80 percent of respondents pointed to them as serious impediments to buying a house.
It's a bit of a shame to see these numbers. Housing prices have dropped significantly from just one year ago. This means that housing is more affordable than ever. Unfortunately, at the same time, more U.S. residents are losing their jobs or seeing their annual income reduced. This sort of negates the benefits of increased housing affordability.
This article has been republished from The Mortgage Roadmap.
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