Crashes and Bubbles

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As I write this, the Dow Jones almost hit 13,000. It was 17 points away from 13,000 before ending the day down 42.58.

The Canadian housing market is on the rise again as the summer weather is coming, where there is more sunshine and more people are able to go outand look at homes.

You've probably heard about the Real Estate market in the US where prices have been going down since last year. And the price of oil looks like its going up again where the morning prices at the pump is around120.99 a litre.

I'm not sure if you also noticed, but shows on TV especially on HGTV have been geared towards housing and selling homes. Shows like "Flip ThisHouse", "Big City Broker", "Designed To Sell" and "House Hunters" just to name a few.

I'm sure you all know, we are looking at a real estate bubble. Although a lot of people would say otherwise and I know people would argue that this time it's different and that the real estate market will not crash because people live in their homes and it's not like the stock market where the stock price can go to zero.

I'm not predicting a real estate market crash, nor do I know when themarket will go down. I don't even know if it will go down. For all I know, the market could just keep going up way past the Vancouver Olympics.

But I do suggest prudence especially with regards to your investments. Here is a like that explains what happened to historical crashes and bubbles. From the Tulip Mania to the Dotcom Crash.

I suggest you read it and make your own judgement.

http://www.taxopedia.com/features/crashes/default.asp

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