Recently, I was trying to explain the reason why I made money in both the Real Estate and the Stock Markets between the years 2000 and 2005, yet the economy was not really doing that great. So I did some research and I found charts that show the Dow Jones industrial average over the last 10 years. I also found charts of the Fed Funds rate and Real Estate home sales over the same period. When I compared the charts I found some interesting correlations between the current real estate market, the fed funds rate and the stock market.

I saw that the last time the Real Estate market had so much inventory was in January of 1996. When I looked at the Fed funds rate in that same year, it was also rising between 4.75 and 5 percent and that is where they are now exactly 10 years later. So if we look at the stock market at that time it was also reacting the same way as it now. With all of this research, if you believe in the money movement strategy which stipulates that wealthy investors tend to move money between stocks, bonds, real estate and money markets. Where do you think the Stock market is heading? I strongly believe that we are going to see some very bullish activity in the stock market over the next 2 or 3 years.

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Dave Perry