August 26th Update – I agree with you, we are in an “everything bubble”

I have uploaded an Investment commentary podcast for August 26, 2018. Click here to go to the show archives page to download the podcast, or you can listen on the link below.

-An analysis of a Forbes Magazine article titled, U.S. Household Wealth Is Experiencing An Unsustainable Bubble
-Anecdotally speaking, when school psychologists and government workers are worth over a million we know that this asset inflation cannot last forever.

US Fed and Federal fiscal and tax policies are always to blame

-Complaining about these circumstances won’t help.
-The only measure that has become less relevant over time is the U.S. stock market capitalization-to-GDP ratio, as US-based corporations have expanded further into international markets.

Remember, the US Fed is just carrying out orders
Bubbles can last much longer than we can remain solvent

-I can do nothing to change this. However, we can deleverage our personal balance sheets and spend less than we earn. We have much more control over our circumstances than we think.
-Think long and hard about taking on debt to expand a business. Let’s not look at current economic data as the deciding factor. Capitalization rates on everything are lower. Even retail stores and franchise businesses have expanded mightily during this boom as their cost of capital was low.
-The time to take on debt is during the busts cycles. Assets are cheaper.
-Since it takes a lot of knowledge to be good real estate investor, I always suggest getting involved immediately. But, keep the above charts in mind when we make investment decisions. Do the math first.
-We have to take responsibility for our actions. During the last real estate boom/bust cycle, nobody held a gun to the foreclosed borrower’s head at the closing table when they signed the closing and mortgage docs, and took on a mortgage obligation they clearly couldn’t afford.
-We can be ready when the next bust comes. We can pare down debt when everyone is accumulating it.