Is The Bubble Ready to Pop?

POP! Is a the bubble near? The quick answer is - Maybe? Markets have been on an uptrend for about 10 years at this point. In the United States we typically have a significant down turn every 8-10 years, which is very healthy and normal. So based on over simplified historic data, are we getting close to the next down turn and how should you prepare?

Is the bubble near?

In my opinion I think we are 18 months to 2 years from a significant downturn. What is my basis for this? Large real estate markets are at all time highs and people are struggling to find affordable house. College students are graduating with large student loans but the jobs they get have not increased salaries at the same rate of student loan debt. Car loans are being stretched out to 7 and even 10 years in some cases. Sub-prime lending for used cars are making it almost impossible for lower middle class to own transportation. Oh, and the stock market teeters on all time highs constantly. These are all signs that we are one or two loose Jenga blocks from a disaster.

How to prepare?

If you are like me and think we have a market correction approaching soon, how do you prepare? The simply answer is to move your assets into safe and liquid vehicles so that when the correction happens, you are ready to buy opportunities. The news will make a correction sound terrible, but in reality it is a great opportunity for those who have planned accordingly. My suggestions is to selloff stocks with big gain, keep cash in fluid vehicles and only invest in steady growth real estate.

What are your next steps?

How will you choose to prepare? Market timing is a hard and sometime irresponsible action to take, but it is equally as irresponsible to believe all markets will continue to increase after a 10 year bull run. How will you hedge and prepare for the next opportunity?