You remember the dot com years where deep down you knew that aol wasn't
worth $100 a share. And more recently you remember the financial crisis and deep
down you knew that houses in your neighborhood were way overpriced. So you've
seen 2 so called bubbles one in tech stocks and one in housing.
Do you remember what happened to your 401k during those bubbles?
So do you think you'd recognize another bubble when it comes along?
Well if the majority of your 401k is in bonds you could be moments away
from another huge bubble.
Do you honestly think that interest rates are going to stay at zero
forever?
Do you know what happens to the value of your bond funds if interest rates
go up?
If you don't know the value goes down, as interest rates go up. So let's
take it a step further, if interest rates are practically zero now they
obviously can't go down much lower. So the value of your bonds has no where to
go but down.
Are you savy enough to know when to get out of bonds? How savy were you
during the last 2 bubbles?
This post was contributed by a community member. The views expressed here are the author's own.
The views expressed in this post are the author's own. Want to post on Patch?
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