2011 Investment Review-Not just a few Surprises!

FOR IMMEDIATE RELEASE
Atlanta, Georgia, United States of America (Free-Press-Release.com) January 13, 2012 -- As we look back on 2011, I believe the things that probably, in the investment market, stand out at me the most are these 4:

1. The U.S. stock market was relatively flat for the year.

2. Gold which is clearly in a bull market; during its strongest months from September through December actually went down.

3. Interest rates when many thought they had nowhere to go but up, again in 2012, they went way down.

4. Residential real estate remained relatively flat for the year as well.

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2011 Investment Review-Not just a few Surprises!

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So let’s go over each one of those individually.

U.S. stocks remain flat. They went up for the first part of the year. Stocks went down for the second part of the year, which was sparked by news over in Europe. Typically in a year before an election you’ll see stock markets go up. It will be interesting to see if the administration has the power and strength to drive up this anemic stock market in 2012.

Gold is in what is arguably it’s most powerful bull market in 40 years. The best time for gold’s appreciation historically has been during the fall and early winter. But in 2011, from August 22nd to December 30th gold went down around 17.67%. One would expect gold to have skyrocketed during that time period. It was unusual too because there was lots of news of fear that you would have thought would have driven people to gold but it didn’t. Does this mean that I think the gold bull market is over? No, I do not think it is over.

Then #3 as we look at interest rates you would think with the money that our government has printed, and with U.S. debt getting downgraded for the first time in 200 years, that maybe, just maybe, interest rates would go up. Well that didn’t happen! People continue to badmouth the United States Treasury Bond (behind its back) and then when confronted face to face with the United States Treasury Bond, weighed against other investments of the world, people overwhelmingly chose the United States Treasury Bond as a wonderful investment for 2012. Interest rates plummeted, and therefore the U.S. Treasury Bond went up. It’s surprising that someone has been said to not be able to pay back that debt as well (US sovereign debt was downgraded) as they could have previously and they’re able to go out and lower their interest rates and say “we’re going to pay you less interest. The trick is on you my friend, not us! So yes we don’t have the ability to pay you back as well. Yes we’re printing money and devaluating the currency, but guess what? We’re still going to pay you less interest. So take that and shove it where the sun doesn’t shine!”

Finally, I wanted to look at several of the major cities in the residential real estate market. We’re now at just about the five-year mark of when USA home prices peaked. Let’s paint the picture. So five years ago today we are sitting here, our home values are at their peak, the highest they’ve ever been in the United States history. Everyone is extremely happy with real estate and we see people in a euphoric state. Many average investors and the average person out there believe that real estate is a no lose “investment”. It is a no lose situation and that it is the way to go if you really want to get into a good career or you really want to make money on your investment dollars. So we all began to see people wanting to pull money out of their accounts in their IRAs and go buy real estate. Sometimes they hadn’t even seen the property before, they bought it. People with no background in real estate going out and getting real estate licenses, to get jobs in real estate. So they can buy homes and fix them up and flip them and clearly make 15 to 20 to 30% profits. We saw banks loaning money to people at 100 to even 125% of the appraised value of a home. We certainly could never have imagined that we would be sitting where we are today regarding the residential real estate price drop.

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