5 of 5 people found the following review helpful
Mandatory Reading for anyone nearing retirement,
This review is from: Facing Goliath: How to Triumph in the Dangerous Market Ahead (Paperback)
It was just three years ago that the financial world as we know it ended in the spectacular collapse of the real estate and banking sectors. Hundreds of billions of dollars in stock market values and home equity evaporated almost overnight, delaying indefinitely the retirement plans of many baby boomers. Yet now, after more than two years of almost uninterrupted bull market, investors appear to be letting their guard down again and are making many of the mistakes they made in the years leading up to the crash. To give an example, risk premia in junk bonds and emerging market bonds have all but disappeared--implying that investors believe that these volatile sectors are no longer risky. Easy money made available by the Federal Reserve has helped to unleash the market's animal spirits again, but is the optimism warranted?
In Facing Goliath, Keith Springer gives it to you straight. He is neither a bull nor a bear; he is a realist. There are plenty of attractive investment opportunities out there for investors willing to take a tactical approach. But those investors accustomed to growing wealthy by buying and holding have a long, hard slog in front of them. The tailwinds that pushed the market forward over the past 30 years have now reversed to create some very menacing headwinds. Unlike in 1982, the start of the last secular bull market, we are not starting from a position of high and falling interest rates and inflation; both are near 30-year lows.
Furthermore, the easy credit that characterized the period is now a thing of the past. Rather than make new loans, banks are struggling to repair their balance sheets. And consumers, given that their homes are likely underwater, have little interest in borrowing more, even at rock-bottom rates.
Using historical examples ranging from 18th century France to 1990s Japan to support his arguments, Springer sees a prolonged period of on again / off again deflation and advises his readers on how best to invest in this climate.
If you are concerned about your retirement savings, pick up a copy of Facing Goliath.
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