Out at the peak

Saturday, December 31, 2005

Predictions for 2006

Ben Jones had a post on future predictions. This is what I put down.

House prices 2006 [national, bubbles]
Q1: +1%, -3% ("little air")
Q2: -1%, -5% ("> normal inventory")
Q3: -3%, -6% ("ARMs, affordability")
Q4: -4%, -7% ("Seasonal")

US Dollar 2006
Q1: +2% (needless rally) I'm glad I'm wrong so far, USD has been weak thus far
Q2: -4% (Euro oil trade)
Q3: -2% (foreign money pouring)
Q4: -5% (foreign can't fund enough)

I believe 2007 will be a scary and true panic year especially with many more ARMs resetting. 2006 will be considered uncomfortable, and 2005 and before will be the good ol' times.

Friday, December 09, 2005

Where to stash your money

So you are out of the housing market. Perhaps you sold in time to realize gain and are now renting. You have cash that you are sitting on and want to invest, but you are scared of the stock market and real estate.

Here are some options:
  • 6.73% I Bond from TreasuryDirect (minimum 12mo commitment, maximum $60K)
  • 4.25% Savings Account from HSBC (type in 'start' for $25 promo!)
  • 4.0% Savings Account from Emigrant Direct
And several options from Everbank:
  • Gold MarketSafe 5yr CD (100% protection, 100% upside)
  • S&P 500 MarketSafe 3.5yr CD (100% protection, 100% upside)
  • 8.24% Icelandic Korna 3mo CD
  • 5.88% New Zealand Dollar 3mo CD (Warning: The Daily Pfennig and interview on MarketWatch believe this currency will weaken later on in 2006)
  • 5.88% South African Rand 3mo CD
  • 6.66% Mexican Peso 3mo CD
(Warning: World Currency CDs are subject to exchange rate increases and decreases. If USD goes down, then you benefit.)

These are somewhat low yield investments if you are use to 12%-24% returns. However, it might be time to be cautious and just hope that your nest egg doesn't decrease in nominal value.

Here are some high risk opportunities to consider:
  • PVX, PGH, PTF -- Canadian oil trusts that have about a 10% dividend (taken from another blog comment)
  • FDG (Fording Canadian Coal Trust) -- 15% dividend (taken from another blog comment)