Signs of the Times - How Short Sale Investors Can Spot the True Turn-Around

At the first sign of slowing declines and a few stocks going up in value, the media is eager to report that the worst is over. Before you run out and begin buying up stocks or bonds it might be a good idea to review the signs of a real bottom. Expect a true turn-around to take place after the following events have been established:

Debt Liquidation. While the big bank bail-outs and automobile manufacturers might seem to have drained the Federal Reserve, remember what we spoke about earlier this week...the giant derivative mess is still waiting in the sidelines with numbers that literally dwarf everything else to date. Wait until the true debt liquidation takes place before getting overly excited by the early signs of a supposed recovery.

Failures. Sooner or later the federal government will stop bailing out bad companies and instead, turn their sights on trying to preserve what is left of the American economy. In a Darwinian struggle for survival, weak companies will fail while larger companies purchase assets for pennies on the dollar.

Don't expect the government to make a major announcement restricting all the bail-outs, instead, simply keep a close eye on spending to see the signs of slowing and eventual capitulation related to the bail-outs. Plain and simple, the federal government won't be able to afford the true cost of throwing good money at bad business.

Wall Street Woes. Short sale investors already know how fickle the media and traditional economists can be when it comes to investment advice so it should come as no surprise that they will once again be wrong when it comes to Wall Street. When you begin hearing that all stocks are now 'worthless' then start searching for signs of the bottom....the same way that real estate has been nearing its own bottom presently. Remember, the tendency is always toward an over-correction prior to a true turn-around.

The Big Event. Every turn around is preceded by a "big event."  While we don't pretend to know the future, we can learn a little from the past and take an educated guess that the big event preceding the true turn around could borrow from the pages of history in the form of a major monetary policy change, national bank holiday or other watershed event that "re-sets" the currency and economic system. Already nations from around the world are calling for a new reserve currency to be issued by the International Monetary Fund while the

Internet itself is rampant with reports speculating on the emergences of the Amero in much the same way Europe adopted a co-existent currency in the Euro. Whatever form the big event takes, it is certain to reduce those holding dollars, stocks and bonds to potential ruin.

 Take time to review the history of other nations in the grip of economic uncertainty to determine how well real estate performed. Indeed, it is one of the few assets that lead to wealth after the true turn-around took place. Meanwhile, keep your eyes and ears open for opportunity to establish your financial future via short sale investments...the time to buy the best bargains is always on the way down - not up. That is when you will really want to sell then reap the rewards of all your hard work and determination.

 See you on the other side!

 Charles Gardner, R.E Investor

Short Sale Investor