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Sunday November 19th 2017

Learn to Recognize a Financial Bubble Before it Bursts

In monitoring your finances, it can be both shocking and disappointing to realize that one of your investments has existed in a bubble, and that it’s too late for you to do anything about it. You’re facing a large loss and a bruised ego. There’s nothing like a sharp sting to make you avoid a bee, but buzzing insects are much easier to spot than financial bubbles. Here’s some advice for the wary investor.

Avoid Hasty Decisions

When considering an investment for long-term profit potential, be sure to take the time for a general overview that includes sound management, market share, and dividend payments. If your “due diligence” reveals that although the price keeps rising, the investment seems to be on shaky ground, it may be the time for you to bow out, and avoid being trapped when the bubble bursts.

An essentially sound investment rises at a rate that keeps pace with the remainder of the market and may decline during an economic down cycle. But bubbles are a bit different. They rocket in value and tend to drop just as quickly. Remember that if the price of an investment rises too quickly, it is virtually impossible to maintain that pace, and this usually causes the bubble to burst.

Be on Guard

If the mainstream media resorts to hyperbole and presents an investment as some sort of economic miracle, this is a sign that the investment may have a problematic future. They hype and excitement tends to overwhelm otherwise shrew individuals. They may fail to investigate an opportunity properly before investing, being swept up in the high earnings they see being made by others.

Still, the old but true cliché about being on your guard when something seems “too good to be true” definitely applies here. You may see those around you being enticed to invest, anticipating they will make “some serious money.” They may boast about the investment and seem overly confident. Don’t jump in on a wave of enthusiasm. Remember that there are professional investors out there doing a great job at boosting the price of an investment, knowing that the amateurs will take the bait.

In most cases, by the time an investment opportunity makes it onto television as an infomercial or 30-second segment on the news, those who were going to profit already have. Those jumping in during the hype are the most vulnerable to sharp declines as the market collapses under the weight of the investment frenzy.

What for the Dip

When the bubble busts, the following things tend to happen:

  • Buyers begin to lose interest, resulting in a price dip
  • Sellers panic and start selling off as quickly as possible, causing a sharp drop in price
  • Those who fail to recognize the dip as the first sign of a bursting bubble will be left holding a severely depreciated investment.
  • As time passes the slow down becomes more apparent and more investors begin jumping ship, dropping the value of investments still in the hands of others.

If you bought into an investment that has skyrocketed, try not to be caught up in the excitement. Do your research. If you see that market forces may no longer support the success of the investment, don’t get greedy trying to hold onto every penny of gain. Instead, quietly sell off your investment when you see the telltale dip. While others begin crying foul around you, your money will be in a safer investment.


Six Financially Smart Engagement Ring Alternatives

Giving a woman a large, sparkling rock to display on her finger is not the ultimate symbol of love and commitment – despite what jewelry storeowners and diamond importers might tell you. Many acceptable alternatives abound for the well-informed shopper. Here are just a few.

Birthstones are Beautiful

If your love was born in May, maybe she will appreciate an emerald ring. Was she born in July? Give her a ruby instead. These stones are still precious, although they tend to be less expensive than diamonds. They provide a splash of color that many women can appreciate. They also give a unique take on an old tradition.

Go with an Heirloom

Perhaps your family possesses an engagement ring from a grandmother, great aunt, or other relative that they have been waiting to pass on to the next generation. You could also consider having a stone taken from an antique piece of family jewelry and placed into a new setting. This option offers a unique style with the addition of a sentimental history and true romance.

Consider a Diamond-Substitute

Many gorgeous diamond look-a-likes are on the market that to the untrained eye could easily pass as the real thing. Some pass inspection more easily than others, so if the illusion of a diamond is important, check those out closely before you buy. Possible options include moissanite, Titania, white sapphires, white topaz, gospherite, and the classic standard Cubic Zirconia.

Second Hand is Good Sense, not Bad Luck

No one likes to think about failed relationships, especially when preparing to pledge their life to someone else. But the reality is that some relationships do not last. Many people from failed relationships are left with beautiful rings they no longer want. These rings frequently end up in local pawnshops. If you and your partner are not superstitious types, buying your engagement ring at a pawnshop can get you the real deal for a killer price.

Stones are not Required

Not all women require the flash of a diamond ring. She may be perfectly satisfied with a classic band with some character, such as engraving or brushed detailing. The options here are almost endless, and the price would be drastically lower than almost any ring with a gemstone.

Save the Rock for Another Day

The best way to save on an engagement ring is not to buy one at all. Maybe your bride is more interested in saving money for the wedding or prefers to save up for one beautiful ring on a future anniversary. If you are lucky enough to find a woman like this, you will be a truly happy man.

These are only a few possible alternatives. Whether you choose one of these or come up with your own ideas, the most important thing is to make sure your future wife is on board. While the “surprise” factor in giving an engagement ring may be lost, you gain so much more by talking seriously about your future and this major purchase before running out to buy a ring.


Address the Cost of Your Funeral Now

The thought of planning for the end of a loved one’s life is certainly not one that appeals to many individuals, but the simple fact of the matter is that failure to prepare will only result in higher expenses and an increased amount of stressin an already tough time.

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