Whew, I’m dizzy! March 15, 2008Posted by shaferfinancial in Uncategorized.
Tags: mortgage rates, mortgages, mutual funds, stocks, when to refinance, when to sell
Last week mortgage rates were all over the place. In fact, on Wednesday, one lender re-priced five times in one day!
What this means is that the mortgage bond market is unsure of the future. Are we going into a deep recession? Do we have to worry about inflation? How are stocks going to do? All these questions without definitive answers leave the market in a deep funk and a resulting unstable mortgage rate environment.
Not only are the bond markets unstable, so are the stock markets. Ironically, these are times that make experts. Yep, there are only three possibilities, good times for the market, bad times for the market, a flat market. As an expert you have a 33% chance of being right. These are pretty good odds, so they will stake a territory. And what is even better for the experts, if they are wrong, no one will call them on it. Sure no one will talk to them for a little while, instead interviewing the one’s that guessed correctly. But, even if their wrong guess cost people big $$, no one will talk about it and a few months later they will start appearing as an expert again. It’s really a great gig if you can get it!
In this environment individual investors make their decisions. No wonder so many of them let fear rule the day. I’m sure we are seeing outflow from mutual funds and people sell funds that apparently are not doing well. If you are considering this, think again. Never sell from fear. Sell when you want to change your strategy from mutual funds to something else.
If you are trying to time the market, don’t. If you are trying to time the mortgage market, don’t. If it makes sense to refinance or buy real estate do. Let the numbers decide, not your emotions.