Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelertoing Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Financial Crisis Questions and Answers

Personal_Finance / Credit Crisis 2009 May 10, 2009 - 07:54 PM GMT

By: Money_and_Markets

Personal_Finance

Best Financial Markets Analysis ArticleMartin Weiss writes: I sincerely hope you’ve been following the lively conversation on my personal blog lately.

It’s a must, especially if you’re looking for ideas on how to turn lemons into lemonade in these bewildering markets!


Today, I want to take the time to answer some specific questions you’ve been asking — to help you preserve and grow your wealth as this crisis continues to intensify. Forgive me if I can’t get to yours. Here are the key topics …

Falling Real Estate, Rising Rates Q. Is this a good time to buy a house or can real estate prices be expected to sink further? Suppose interest rates surge. Then how am I going to get a cheap mortgage?

A. Real estate values could fall further, but most interest rates could rise sharply. So if you feel you must buy a home … if you can find a property selling for half its peak value (or less) … and if you can’t pay 100 percent cash … then there is one advantage of buying now: This could be one of the last opportunities in many years to get a fixed mortgage at such low rates.

Q. Are Ginnie Mae funds safe?

A. Long-term Ginnie Mae funds could suffer a big price decline as interest rates rise. Short-term Ginnie Mae’s don’t involve that price risk. But still for maximum safety, I recommend short-term Treasury bills. (See also my answer to the next question.)

HSBC and Bank Safety

Q. I bank with HSBC, both here and in Panama. I know that HSBC has a horrendous leverage due to derivatives, but nowhere can I find a rating on them. Should I be seeking a safer bank?

A. HSBC America is rated D+ (”weak”), but we do not have a rating on other HSBC companies. In any case, the safest place for your money is a Treasury-only money market fund or 13-week Treasury bills bought directly at www.TreasuryDirect.gov. You will still need a local bank for transfers and other business. But with the overwhelming bulk of your money in Treasuries, you can sleep nights.

Q. I heard about a list of weakest and strongest banks you maintain. Can you tell me where to find it?

Click here for the weakest banks, and click here for the strongest banks.

Stuck in Annuities Q. What should I do with my remaining annuity that is the only retirement income I have? It has the harshest early withdrawal fees. Actually there is very little income on these annuities since they’ve lost almost half their value. What say you?

A. Although I hate early withdrawal penalties, getting out is the cleanest solution; and with the recent market rally, your proceeds shouldn’t be quite as disappointing as they might have been two months ago. Another alternative: Keep the annuity, but hedge against some of your downside risk with an inverse ETF. That way, when the bear market resumes, even if your annuity continues to sink, your inverse ETF should go up.

Bond Market Disaster Q. Suppose no one wants to buy U.S. bonds. Are we to expect massively higher interest rates? But what happens then to this horrible economy?

A. Bonds are already falling in price, driving their yields higher, and you can expect a lot more of the same. In a period that has already seen more giant companies in bankruptcy (or bailouts) than any other in history, higher interest rates could be the coup de grace.

Bank of America

Q. BofA needs billions and their stock jumps 14%. What’s up with that?

A. The government’s promise to be the grand savior has investors temporarily mesmerized. But rising interest rates could end that magic spell quickly.

Shaky Life Insurance

Q. I am getting very concerned about my whole-life insurance policy. I have a current cash value of about $30k, and am due to make my yearly contribution soon. But I have a nasty feeling that when the insurance companies start taking the hits that appear to be inevitable, my policy may just evaporate. What do I do?

A. If your insurer is rated D+ or lower, I’d consider pulling out. If it’s rated B+ or better, it should be secure. And if it’s C-, C or C+, I’d monitor it carefully. For the latest list of weakest insurers, click here. Also click here for more detailed instructions.

Short-term Treasuries Q. First, let me say thank you for the early and unambiguous warnings. I am still heavily invested in short-term Treasury money markets because capital preservation trumps missed opportunity. But it is hard to stay disciplined while collecting no yield. With banks being required to raise additional capital following the stress test results, would you consider buying CDs from any of them if the yields are decent?

A. If the bank is rated B+ or better and you keep your CDs under the old $100,000 FDIC limit, it’s something to consider. Otherwise, no. Click here for additional instructions.

Mortgage Repayment Q. Should I pay off my 30-year fixed $92,000 mortgage at 5.37% interest? I have $130,000 in cash, and $300,000 in a 401K.

A. Generally speaking, if it’s an adjustable-rate mortgage, it could be a burden and it’s a good idea to pay off as much as possible. But if it’s a fixed-rate mortgage at a reasonable rate, it should not be as onerous. Rather than deplete a big chunk of your available cash, yes, it may make sense to pay it down at a faster pace than required — but not all at once.

Good luck and God bless!

Martin

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules