OK, it’s time to talk about bubbles. Investor Jeremy Grantham of GMO fame has called a few bubbles over his stellar career. He sees three today: Bonds, stocks, and real estate. Your Survival Guy, not famous at all, fought through the live-fire of managing client money during two brutal bubbles already in this young century. It wasn’t easy, but we got through it. That’s what I see today. Knowing how to survive the worst of times is an acquired skill, and I’ve seen my share of it.
When I think about a real estate bubble, I think about you. What can you do today or in the next few years to ease the pressure in your real estate world? How about paying off your mortgage? That’s where I’d start. Then I’d think long and hard about moving to a low tax frontier where you’re not the game being hunted.
Grantham believes even value stocks are overvalued. Not compared to the nosebleed prices for the big growth names we all know. And not compared to the crazy meme stocks. But what if he’s right? What if some of the value oriented names are also overvalued? Well, first, I’d get familiar with Richard C. Young’s Maximizers.
Dick wrote recently:
I developed the Dynamic Maximizers® strategy to serve as an alternative to fixed-income portfolios in an era of historically low and manipulated interest rates.
The Dynamic Maximizers® is a maximum safety portfolio, ideal for IRAs, ultra-conservative retired investors, and education savings programs.
So far this century, stocks have cratered over 50% twice, with a third crash virtually baked into the cake because of total incompetence in Washington.
My Dynamic Maximzers® strategy was a port in the storm during both the dotcom bust and the financial crisis. And while past performance is never a guarantee of future results, I expect similar relative stability from the Maxis during the next stock market crash. Keep up with our latest reports.
Action Line: Bonds will always play a role. It’s just a matter of fitting them into the proper mix for you. Bubble or not, I’m here to help. I’ll never desert you, especially when things get sticky.
E.J. Smith - Your Survival Guy
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