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106

If you're moving up in house in the same area, it's better to wait until the alleged bubble bursts, since bubbles affect higher-prices homes more than lower-priced homes. You could also sell now and rent until the market bottoms out. There is no shame in renting, especially if you don't plan to stay in the house for more than a few years. If you're ...


29

If you sell and buy around the same time, the market situation (hot, cold, before, after, or no crash) is of little relevance - it just affects the size of the numbers on both contracts, and about the same, so it's mostly a wash. If you want to take advantage of your prediction, you have to split the selling and the buying in time - several months at least -...


22

Tricky choice, but there's a couple of things to consider. You said you plan on upgrading to a more expensive house, so you might save more on the new house post-bubble than you'd lose on your current house. Suppose you want to move from a $1M house to a $1.5M house - you'll need $0.5M. The bubble bursts, and housing prices fall 20% across the board. Now you ...


13

From the perspective of an investor and someone in high-tech during that period, here is my take: A few high tech companies had made it big (Apple, Microsoft, Dell) and a lot of people were sitting around bemoaning the fact that we all should have realized that computers were going to be huge and invested early in those companies. We all convinced ...


7

If you think you can actually pull this off, the best move is to detect bubble, sell, rent, wait for crash, buy. But you probably can't. Let's put it this way. I detected the 2008 bubble in 2004. For this scheme to work you would have to have been able to say beforehand when the bubble would burst and sell close to the burst. My detection in 2004 was too ...


7

It's tough to share exactly what happened. Go to yahoo and look at the chart for Cisco from 1990 to 2003 or so. From a split adjusted 8 cents a share, it peaked at just under $80 in March 2000, up by a factor of 1000. People were buying in thinking this stock would continue to rise at this pace, but logic says that's preposterous. By April of 2001, it was ...


6

The dot.com companies were purveyors of the Internet, then a "new" technology around 2000. Everyone "knows" that such a new technology will change the economy and society. What people didn't know at the time was WHICH companies would be the leaders/beneficiaries of such change. So investors pushed up the stock prices of ALMOST ALL companies in the "space." ...


5

To add to the already existing answers, most of the dotcom companies used an accounting sheningan so profusely that everything looked rosy. To account for revenues, what dotcom companies did was, get into a barter transaction with another dotcom company by selling advertising space and stuff on each other's website. So the final outcome was each had quite a ...


5

What happened was that people would start an "Internet" company without any viable business plan, and investors would pour money. Any company with ".COM" or "eSomething" or "netXXX" or whatever would get tons of money from investors, basically selling dreams of getting rich fast. The companies that flourished back than had often no sales and no income, yet ...


4

When over the long term housing costs in a area rise faster than wages rise, the demographic of who lives in the area changes. The size and income parameters change. A region that was full of young singles is now populated with couples with adult children, that means that the businesses and amenities have to change. At a national level it isn't sustainable ...


3

Prices are not the only issue. After a bubble bursts, it can be very difficult to sell at any realistic price, and so you can be stuck where you are while watching lots of affordable properties that you would like to buy come and go on the market. But also remember that bubbles can only be detected in retrospect. Asset price rises that seem irrational are ...


3

One way or another, you are going to experience the difficulty of the market. When a market is up, there are usually more buyers than sellers. That's what's driving the price up. This shows in how quickly a fairly priced property will sell. As a seller, this is fun. You often get the price you ask for, sometimes even more, and you sell quickly. But if you ...


3

I'm no financial expert, but one other thing I'd think deserves a bit of consideration is which end of the process that will be tough. When the market is high, you'd expect ease at selling and challenge at buying. When the market is low, you'd expect ease at buying, but challenge at selling. So the period in the bubble would seem more rough if you need to ...


2

How would one hedge against a bond bubble bursting? or bearish sentiment in the bond market You can short bonds in the bond market. You can short bond etfs in the stock market. You can short bond futures. You can buy short-bond etfs in the stock market. You can buy double and triple leveraged short-bond etfs in the stock markets. You can buy put ...


2

A long term investor should avoid irrational securities such as Bitcoin and its related stocks other than possibly a small amount of lottery ticket gambling money that you are willing to lose on a long shot horse. Volatility is not your friend. A short term investor or trader looks for the trend and tries to catch some of the ride while practicing ...


2

In a strictly mathematical sense, no. Or rather, it depends what 'long run' means. Say today the home average is $200K, and payment is $900/mo. The $900 today happens to be about 20% of the median US monthly income (which is approximately $54,000/yr). Housing rises 4%/yr, income 3%/yr. In 100 years (long enough?) the house costs $10M but incomes are 'only'...


2

For most people, most of the time, the issue is qualifying for the mortgage, not the price differential between the old house and the new house. The problems is that periods when prices go down are often times when interest rates go up, like now. It tends to be a wash, since you wind up with the same monthly payment. You have a particular situation which ...


1

Do some research on the previous bubbles and see which areas recovered faster Some of the things that prevent a market from dropping too much is the school district. More recently is the walkability and general feel of the neighborhood. As the population gets older, more people want to downsize, and if your current home is in a desirable area for folks ...


1

The trick is start renting before the bubble bursts, then move into a house afterwards. Both of my parents did that and it worked out quite well for them!


1

You haven't even mentioned whether you own property or not. If you don't own property now then you don't have to do anything. If you think there is going to be a property bubble and it will soon burst just get your finances in order and be prepared to buy if it does burst (that is if you are interested in buying property). If you do own property now, you ...


1

Two big things: Commercial activity on the Internet was frowned upon until the US Gov't got out of the internet business in the 90's. So just about everyone learned about this new thing that dramatically increased the efficiency of doing many different things. In some ways, it was like the discovery of the New World by Columbus. We were at a level of ...


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