My last post several days ago focused on the Dow Jones Industrial dropping 500+ points. Today, the Dow climbed 400 points on reports that the governments MIGHT create an entity to absorb banks' bad debts.
There is so much volatility these days that analysts are attributing to the nervousness of investors. Nervousness isn't the only word I would use...Confused, shocked, or freaked out would be other terms I would use to describe the current economic situation.
The Chicago Board Options Exchange has a volatility index known as VIX, which set a new high for this year in trading. This index is referred to as the "fear index," and today it reached levels not seen since 2002.
The bottom line is that investors are looking for safe haven's to park their money as opposed to playing stocks with the risks they currently present. For instance, on Wednesday the demand for a short term 3 month Treasury Bill was so great that the yield actually dipped into negative territory for the first time since 1940. That means that investors are willing to take very little if any return in exchange for parking their money in a safe place.
As a real estate agent, I am urging many of my clients to consider pulling some of their money out of the stock market and investing in multi-unit income property. With rent prices only on the rise here near the beach in Los Angeles, now may not be a bad time to diversify the portfolio by negotiating a good deal on a 2-4 unit property.
We will see what happens during tomorrow's session....One thing is for sure....We are all watching intently.
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