How to Get Safe in Today's Debt World.

by Natalie Pace.

Important Investor Alerts and Resources on Gold, Real Estate, Bonds, Stocks and more.

On June 8, 2012, Standard and Poor's released a statement warning that there remains a negative outlook on the U.S. credit rating, and that, unless the debt and deficits are dealt with, they could lower the credit rating again. This release occurred on Friday, after the markets had closed, so the news media largely ignored it. It was a warning after all. Not an action.

However, warnings of this nature are not to be taken lightly. Last year, on August 5, when the S&P stripped the U.S. of its AAA rating, the Dow Jones Industrial Average lost 635 points overnight. As I've outlined in depth in my article, "The Safest Countries in the World," the very sad and severe crises in Portugal, Italy, Ireland, Greece and Spain (PIIGS) are all debt related. Two years ago, they were just warnings, too. In fact, since these PIIGS countries are in the Eurozone, they still receive a T&C Assessment of AAA by Standard and Poor's, which investors, like MF Global, took to heart -- at great peril.

And you've already noticed how our Debt World has affected your investments in real estate, stocks, bonds and even gold -- most of which have had flat, if not dismal performance this year. MF Global, the 8th largest bankruptcy in U.S. history was as a result of bad bond investments (in PIIGS). Last year, on November 9, 2011, Jefferson County, Alabama filed for bankruptcy, in the biggest municipal failure -- $3.1 billion -- in history. Detroit is nearly bankrupt, and more municipalities are at risk than their bond investors are aware of.

Gold is down 17% from its high of $1,895, set on September 5, 2011. Millions are still losing their homes, which drags down home prices, and reduces the creditworthiness of buyers.

So, how do you get safe? How do you save your home? Who do you trust?

Below are the Best Of articles that I've penned on each subject, offering actionable strategies that have yielded, and will continue to yield superior results.

Ed's Note: Please note that the data in the articles corresponds to the date the article was penned, and may be different today -- for better or for worse.

Strategies for Getting Safe in Gold, Real Estate, Saving Your Home, Protecting Your Assets, Stocks, Bonds and Much, Much More

1. Gold. If you purchased gold at $850/ounce in 1980, you had to wait 26 years for the value to return. Most of the time, gold seesawed between $250-$350 an ounce over that period. Now, with prices near $1600/ounce, large holders of gold, including the United States, Russia, Brazil and more, could be tempted to sell high. For a brief history of gold and information on which countries are the biggest holders of gold, read, "Gold Investors Beware" from the April 2012 NataliePace.com ezine, volume 9, issue 4, and "The Gold Crash of 1980," from the September 2010 ezine, volume 7, issue 9.
   
   
2. Real Estate (including saving your home). Almost 10 million properties were repossessed between 2008 and 2012 (9,896,211). Earlier this year, RealtyTrac predicted that foreclosure activity would be higher in 2012 than 2011 (in other words, over two million), but lower than 2010 (so, less than three million). So, far this prediction is right on course. There were 967,698 foreclosure filings between January and the end of May. This means that there will no real upside in real estate prices (except in certain cities) until 2013. However, it could be a good time to buy, while interest rates are low. Most people forget that the largest expense in the home purchase is interest, so with rates at an all-time low, even if the value of your home declines a little this year, you'll still end up paying tens of thousands less than investors will pay next year, if interest rates rise.
   
   So, if you can buy a home, buy. If you can re-fi with a fixed mortgage at rates near or lower than what you have currently, do it now.

If you are underwater on your mortgage or delinquent on your payments and are considering the "unthinkable," read the important articles listed below now. Do not drain your nest egg trying to keep a home you cannot afford. That is sinking your lifeboat and making the bankster rich, instead of covering your own assets first.

Should You Short Sale?  by Natalie Pace.
Debt Collection Facts. by the FTC.
Hello Freedom.  Good-Bye Debt.  by Natalie Pace.
Should You Do the Unthinkable? Call-in radio show.
Real Estate: Interview with Dr. Lawrence Yun, chief economist, Realtor.org
Americans Are Underwater. Experts Discuss How to Get Safe.  by Natalie Pace.
When Will Real Estate Recover? Q&A with Dr. Lawrence Yun, the chief economist of the National Association of Realtors.


3. 911 Investor Alert: Bonds and Treasury Bills. Now that even Warren Buffett has admitted bonds should come with a warning label, you need to get smart on how to understand the risk in bonds and select high quality safe areas for your money. I first warned about bonds in September 2010 -- well before the Greek bond crisis and the S&P downgrade of the U.S. credit. Get bond smart by reading the important bond articles from the May 2011 ezine (volume 8, iss. 5), the September 2011 ezine (volume 8, iss. 9) and the December 2011 ezine (volume 8, issue 12). In the meantime, low-risk, cash-positive hard assets are King (and no, as I indicate above, I'm not suggesting to go all in on gold). Bonds and bond funds are vulnerable to loss of principal value now. Credit risk, more than interest rate risk is driving the bond markets, as is seen clearly in the PIIGS countries. (The European Central Bank rates are right in line with the U.S. Federal Reserve, while PIIGS countries are forced to offer interest rates 5-6X higher to attract lenders.)
   
   One More Article of Interest
   "Bond Beautification Project," from the NataliePace.com ezine, vol. 7, issue 10.
   
   
4. Stocks. I update the Hot News on Cool Stocks report and market update twice a month, in the monthly ezine and then around the 15th in the mid-month update. Each year, I update the stock pie charts, which include important notes on what is safe, what is hot and how to diversify. I also provide new analysis on a regular basis as to monthly, annual and election year market performance trends. It would be too lengthy to list every article because there are a minimum of three in each ezine. So, browse the archives and be sure you are up to date. Or, if you want to have fun and get it all in one shot, just come to my next Investor Educational Retreat. Call 310-430-2397 to learn more.
   
   
5. Municipal Bonds. Bond salesmen sell muni bonds on the basis of being triple tax free. But are investors aware of the principal loss risk they are taking? The higher the interest rate, the higher the risk. There is a special FINRA Investor Alert in this ezine on municipal bonds that all muni bond investors owe it to themselves to read.
6. Solar Panels. Solar kit prices have come done markedly in the last three years, and the tax incentives continue to be available to Americans. The payback on your investment could be 4-7 years. Why have your money sitting idle, earning no interest (or worse, at risk of principal loss in your stock/bond portfolio), when you could invest in something that will power your home for the rest of your life? The cost savings, particularly during peak hours, put more money in your pocket when you need it most, and the panels keep paying dividends (putting money in your wallet that would be spent on utilities) when you retire, lose a job or get sick.

Bottom Line
Between January of 2008 (when I first warned to get safe from the Great Recession) and March of 2009, the Dow Jones Industrial Average lost more than half of its value.

Performance of the Dow Jones Industrial Average
January 1, 2008 through March 30, 2009

Source: Money.MSN.com. For illustration purposes only.

Using one smart, easy trick, investors like Bill and Nilo Bolden saved their nest egg and earned gains, while those around them lost hundreds of thousands of dollars. (Click on their names to hear them talk about this in their own words.)

Performance of the Powershares Laddered Treasury Bond Fund
October 1, 2007 through October 1, 2009

Source: Money.MSN.com. For illustration purposes only.

Will this trick work again in 2012? Unfortunately no.

But other strategies will. And those who act before the fall are the ones who are poised, as Bill and Nilo were in 2008, to gain.

Call 310-430-2397 if you wish to join me at the July 6-8, 2012 Investor Educational Retreat. We still have one seat available, in this boardroom retreat that is limited to just a dozen attendees. If you can't make the July retreat, the next boardroom retreat will be October 6-8, 2012, in the sunny beach town of Santa Monica, California.

 

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and Put Your Money Where Your Heart Is. She is the founder and CEO of the Women’s Investment Network, LLC (a global financial news, information and education site), where she has been adding a splash of green to Wall Street and transforming lives on Main Street for more than a decade. Natalie is a blogger on HuffingtonPost.com and a repeat guest on national television and radio shows such as Good Morning America, Fox News, CNBC, ABC-TV, Forbes.com, NPR and more. As a strong believer in giving back, she has been instrumental in raising tens of millions for public schools, financial literacy, the arts and underserved women and girls worldwide. Follow her on Facebook.com/NWPace. For more information please visit NataliePace.com.

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in North America. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.   Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.