Safety Of Your Retirement
In case the U.S. Catches an economical flu may the rest of the world get pneumonia? The warning signals include a market meltdown, a real estate depression, growing inflation, higher unemployment, a weak dollar with growing shortages, widening trade balance, lower rates of interest engineered by the Fed, an incredibly volatile stock market and prevalent prediction of economic downturn. Consumer confidence is low and slumping with investors hurrying toward safety with their retirement dollars. At the first several trading days of 2008, investors have transferred millions from the stock exchange into safer alternatives. If you are leaving you money in the marketplace, make sure your retirement plans will not be derailed by the worst case result.
If you are taking your dollars out from the market to safer places, what're your options? First there is bank Compact Disc, Treasury bills and money market accounts. The excellent news is the fact that these are super safe, prepared accessible and simple to money in when the time comes. The bad news is the rates of interest they pay do not even keep up with inflation. These choices are super safe if your only concern is Security of principal, but they can be incredibly unsafe if you are afraid of Outliving your retirement money. Since these choices have traditionally not kept up with inflation, they might be an excellent short term parking place for the retirement money, but are not a long term option.
Also, income taxes take a large bite from your paltry earnings. Corporate or government bonds may offer you good safety, but not during periods of low rates of interest. As rates rise - and you might be assured that the rate of interest cycle hasn't been cured - the marketplace value of fixed rate bonds may decrease. Yes, you will get your principal back at maturity, but in the meantime you will have a difficult time keeping up with inflation.
What about real estate? Since most retirees aren't real estate gurus, the safest path is to place your cash in real estate investment trusts where it's professionally managed. Given the latest track record of Professional real estate investors who fueled the sub cost meltdown are you sure you would like to entrust your money to them? Maybe a good long term solution, but why purchase when costs are dropping like a rock? International opportunities obtainable in mutual funds and stocks are getting strong recommendations currently. So maybe this is the perfect place. The last time I looked mutual funds and company stocks waxed and waned with economic gyrations. For more information ,please visit www.webprez.com/6075/96