subject: At Present, Not To Invest Is The Best Investment [print this page] Some economic experts have ever made such an anticipation of the global economy in the year of 2012.
First, under the auspices of Germany, Europe will tighten policy to save the euro, and this initiative will reduce the living standards of European people, therefore Europe may face the turbulence of the government. Second, since the crisis of United States, emerging countries, including China, have got a lot of hot money due to the easing of the U.S. monetary policy, but the money has made a sum of bubbles in the economic development. Beginning from this year, as the Europe and the United States government can not continue to make a substantial monetary easing, the bubble is about to burst. Third, the U.S. economy seems to have bottomed out, and the next year should continue to recover, but the 2012 is an election year in the United States, and there are many uncertainties in the political aspects. It is difficult to reconcile the position of the various parties and this may lead to political crisis, which in turn make the economy once in recession again. There is little possibility of re-introducing a substantial easing monetary policy, and the unemployment rate is still high, so house prices will continue to fall. In short, even if Europe and America have a slight monetary easing, this is only to increase banks' liquidity, and will not produce high inflation. Therefore next year in Europe and America, there will be a prolonged recession, and lead the major emerging economies into trouble.
This sounds very pessimistic, but people can prepared for the worst, hope the best happen. In the current global economic downturn and the uncertainty of the economic development, where can the ordinary people make investment?
Once again people should keep in mind what Buffett once said, that is the risk og investment comes from the fact that you do not know what you are doing. The first principle for investment is that do not lose money. The second principle is never to forget the first principle. In other words, it is the premise that any investment must keep the principal.
When we asked the retired American "baby boom" generation what the best investment was, most of them aging around 70 years old said "we live in the house for over 30 years, and it is the best investment of a lifetime." How the faith that residential is the best investment has come into being? For most people, even though the residential value in the 30 years prior to 2008 was barely able to keep up with the inflation rate, in the same period, the average annual rate of return of each stock market index ranged from 8-13%, which was significantly higher than the residential investment, but they still believe that the investment in real estate is the only not money-losing proposition.
by: alan
Zaproxy alias impedit expedita quisquam pariatur exercitationem. Nemo rerum eveniet dolores rem quia dignissimos.
