The Market

I haven't made any changes to positions or allocations in over 5 years, and even then it was only to get out of this DOG - VWUSX.

Particularly concerning a retirement account, now is NOT the time to make changes, especially if you're in your 30's-40's.

I did pull some $$ out in April from non-retirement, and I wish I'd pulled out all of it.

 

on a seperate note: I am renting a house at the beach. I am paying the mortgage. 50% of the houses here are for sale. The owners informed me they want to put it on the market in the Spring. Am I missing something or are they incredibly stupid?

 

You are renting and paying the mortgage?

 

my rent pays their mortgage

 

They're out of money.

I've been tripping on the beach thing for awhile. The prices got so completely out of hand.

In 2000, I kept a boat at wrightsville and was selling it b/c we had a kid on the way. I started looking at places there to replace the boat as a place to stay.

Decent condos could be had for about $400-$500k. By condos I mean duplexes, quadraplexes.

The realtor actually kinda talked me out of it. She said stuff had gotten so high recently it was nuts. She said renting was cheap.

8 years later - they've all more than doubled. Last year we rented a unit for $1800 / week peak season - oceanfront, redone kitchen, plasma, etc. This unit was for sale asking $1.4 million. That was in June 2007, it had been on the market since march 2007. The taxes on the unit were over $30k. I talked to an owner of the next door unit who said that never in 20 years of ownership had they gotten $30k in gross rentals. So - you could own a unit outright and not have cashflow just based on the taxes.

Went to the beach 2 weeks ago - the $1.4 million is still for sale, a unit across the street ( same layout, not oceanfront ) sold for under $700k.

It's nuts.

 

they are going to end up with no renter and a house that won't sell

 

You sure it covers them? If so - they are total idiots.

 

It should be close. Folly Beach wasn't expensive in 1998. Of course who knows about anything they took out with it.

 

Many of those loans are one year interest only notes that some banks just keep renewing year after year. The banks are finally beginning to stop that and that's why there are many, many for sale now. No way those people can afford a termed out mortgage. They never intended to.

 

OK.. The government has offered 700 billion of taxpayer money to bail the banks out. They've loaned out money to AIG, they negotiated a buyout of Bear Stearns, they've dropped the fed rate from 2 to 1.5 and made it clear that they will do what is necessary, along with other central banks around the world, to prop up the financial system. Yet, the market keeps falling. Is this just irrational fears of investors ignoring all the help given or is it more than just the credit crunch?