Market has been rallying from past few days amid Fed bailingout of Bears Sterns and lowering the interest rate. Fed saved couple of moreinvestment houses going down by making available couple hundred billion dollarsto them. And today JP Morgan was forced to raise the price of Bear Sterns (BSC)to $10 from fire sale price of $2. This seems like a sign of near bottom forfinancial and in turn housing as it more or less depends upon the readilyavailable cheap money.
Mortgage rate has been hovering around 6 percent from lastfew months despite all the turmoil in finance and fed rate cut. There arepeople buying TIPS – (inflation protected securities) at near zero% rate. Thissuggests that the inflation is going to go up from where it is. Frominflationdata.com as of March 14 2008 inflation is around 4.0%. But this isgoing to up faster than any one expect as dollar is declining and everythingfrom gold to commodity is going up. Exports are increasing, but they are notnear of voiding the trade deficit. When the energy price is up all businessesare affected. To control the inflation, Fed needs to make the dollar strongerand to do this Fed has to start increasing the interest rate!!!!!
In any case, you must be diversified at all the times.Diversification among wide spectrum of asset classes e.g. house, gold/platinum,stocks, mutual funds, bonds and cash.
You could get some stock investing ideas from our “stock list” section. All thestocks are based on value investing.
Good Long term stocks: TIE, OCR, SPWR, WM, ESI, HPQ, IBN