In March of 2008, the world markets woke up to the news that Bear Stearns, the fifth-largest U.S. investment bank, had essentially collapsed. The fall of Bear Stearns nearly crippled the short-term money market, the lifeblood of modern finance. Bank lending ground to a halt. Municipal financing, which pays for roads, schools, and other daily essentials, evaporated. The company's fall changed the way the government regulates Wall Street, and it shook the faith of investors to the core. How did this happen? How will it affect the future of the markets? What does it mean for the individual investor?
In Bailout, John Waggoner the investment columnist for USA Today answers these and other questions surrounding the recent market catastrophes. As the author explains, this was a different kind of market panic. Bear Stearns didn't collapse because its stock was low the company crumbled because no one would lend it money. The Federal Reserve then intervened, not because they were worried about Bear Stearns, but because they feared a meltdown in the credit markets if Bear defaulted on its debt.
The dangers in this cycle, says Waggoner, could be bigger than we've seen in a long time. Investors need to act now in order to protect their portfolios, and Waggoner shows how. The author offers specific advice on protecting portfolio finances against both inflation and deflation through the use of Treasury bonds, gold, commodities, and real estate. He explains the critical importance of paying down debt pointing out that paying down a 19% credit card is the equivalent of getting a 19% return on an investment! And he offers a range of other strategies to help your portfolio weather a storm, including rebalancing and using foreign currencies as well as identifying a few strategies to avoid.
Your ultimate protection, Waggoner explains, is to have a plan. Assume we'll all get through this you can't predicate your investment plan on everything crumbling. Start with the very basics: set your investment goals and match your investments to those goals. With step-by-step expert advice, Bailout will show you how.
From the Back Cover
What You Can Learn From The Meltdown In The Credit Markets And The Collapse Of Bear StearnsPanics in the stock market are nothing new―so what makes the recent events surrounding the credit crisis and Bear Stearns collapse so worrisome? More importantly, what does it mean to you as an individual investor?
In Bailout, John Waggoner―the investment columnist for USA Today―sheds light on the causes of the Bear Stearns collapse and the credit crunch, while offering a glimpse of what the future holds for investors. The fall of Bear Stearns, says Waggoner, signals a new era. Warning readers of the perils that lie ahead―specifically inflation and debt liquidation―he provides solid strategies for investors who want to begin protecting their portfolios. He explains step-by-step how to set short- and long-term investment goals and match your investments to those goals, creating a portfolio that can weather any storm.
From paying off debt to investing in treasury securities, the strategies laid out in Bailout will guide you to safety and success in today's volatile market.
About the Author
John Waggoner is the investment columnist and personal finance reporter for USA Today, where he writes a weekly investing column. Previously, he was senior editor at the Independent Investor, an investment advisory newsletter. He is also the author of The Fast Forward MBA in Investing, which is published by Wiley, and coauthor of The Busy Family's Guide to Money.
