Asset Bubble – Will the bubble burst?

As a general guide, you may like to consider:

• Look for current value in the stock market. Don’t follow the herd. Instead, head for currently overlooked stocks that hold true value at a great price. These are less likely to suffer from a burst bubble. 
• Avoid chasing the ‘hot’ stocks that are overvalued eg. currently banks and health care
• Take some profits from the stock market on the way up. If you have made good profit don’t get greedy and leave it all sitting there in the hope it goes higher. No one can tell when a boom will end so be prudent and take some money off the table. 
• Get some advice and consider increasing the money you have in cash, depending on your personal circumstances, amount of time to retirement and risk tolerance. 
• Pay down debt. Remember, in the event of deflation, debt is the enemy.
• Avoid taking on more debt. With low interest rates, there’s currently a lot of temptation to borrow more than you should.

For those interested, below are some links to articles regarding the current economic climate and ‘bubbles’:

• • 27 March 2015 – Lindsay David
    Australia is in one of the worst housing bubbles we have ever seen
    
    
  • 16 March 2015 – Mark Mulligan
    Australian households awash with debt: Barclays
    
    
  • 4 March 2015 – Bianca Hartge-Hazelman
    ‘We are driving very fast without seat belts’: Experts warn of new asset bubble
    
    
  • 4 March 2015 – Rob Williams
    Lewitt: Comparing Stocks With Past Bubbles Is ‘Ticket to Boneyard’
    
    
  • 4 March 2015 – Dan Weil
    Euro Pacific’s Schiff: Economy, Stock Market Not as Strong as Enthusiasts Claim