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The stock market has been over inflated for quite some time now, and the crash was a necessary correction. Stockbrokers and investment bankers have been creating wealth out of nothing. A stock is supposed to be a claim on a company’s future cash flows, but people have found ways to drive up prices of stocks, therefore making it look like companies are producing more goods when they actually are not. This causes a lot of problems.

First, since our stock markets are increasing in value, but we actually are not producing any more goods, inflation occurs. This makes the dollar weak and reduces our global buying power. Next, if we are creating wealth out of nothing, eventually the market, if it is functioning correctly, will adjust. That is what we have been seeing the past couple months. It is going to hurt a lot of 401ks and it will most likely send the economy into a prolonged recession, but it is necessary otherwise we will keep making something from nothing.

With each holiday season comes a new toy or something that every child must have. I have no idea what it is going to be this year, but I do know of some really cool gadgets that are coming out. Although reviews for the Blackberry Storm have been mediocre, I am still really excited to see another capable touch screen phone besides the iPhone. Another great gift idea is wireless headphones. Everyone hates the little white cord from their ears to their pocket, and finally that can be removed.

Key chain finders are finally becoming prevalent and cheap, and anyone who has that friend who always loses keys or their wallet should look into one of those. Wireless security cameras are also getting cheap. You can use them in your office or home, or just play with them with your kids. If none of those suggestions work, then just go to the Apple Store, practically everything there is cool. With so many great deals on the Internet for really neat gifts, the gift certificate probably will not cut it this year.

As we have learned, the value of real estate does not continually go up. People used to believe that real estate was the one safe investment, but prices have dropped significantly over the past two years. Our economy has stopped growing, and construction has virtually halted as well, and what made real estate valuable was the assets that were built on it. If no buildings or anything are being produced, and no one is buying the already existing structures, real estate value will go no where but down. It is simply supply and demand; as the demand decreases, the price will go down.

However, real estate values are cyclical since they are tied to construction, which is very cyclical. This means that once the economy starts growing again, production of houses and new cities will increase, helping the value of real estate. Unlike a car that depreciates with time, land is still going to appreciate if it is given enough time. Real estate prices are going down in the short run, but they will turn up again. Someone could make a lot of money if they are able to predict when the prices will go up again.