Fed Chairman Bernanke Forecasts More Trouble for U.S. Economy

If consumers weren't already worried enough about the economy as the holiday season approaches and the year 2007 winds down, the latest from Fed Chairman, Ben Bernanke, is not good news. In early November, Bernanke predicted that the economy is still going to get worse before it gets better.

If you have been keeping in touch with the headlines, the housing market continues to suffer. Many sources report reassuring economic growth, but not in the housing market.

If you read the headlines from CNN.Com, you might find a story like the November 9, 2007, "Sinking Dollar, Rising Portfolio" report from Paul J. Lim of Money Magazine. He reports that the value of the dollar continues to fall in comparison with some other foreign currencies. One of the good aspects of the weakening dollar he points out is that U.S. exports are selling for cheaper prices overseas, thus helping to alleviate some of our trade deficit.

If you are not of a financial or economic mind, it could be hard to make sense out of all the financial headlines. However, many sources seem to agree on the wisdom of putting your money in secure investments. If stocks will fall even more, then you can lose a lot of your retirement money in the stock market. Having a diversified portfolio is your best bet in keeping with the old saying - don't place all of your eggs in one basket.

Here are some diverse strategies for what you can do to protect yourself from the hard times still in store for the U.S. economy as we head into 2008:

1. Get some financial advice to redistribute your stock portfolio to the most secure investment funds. A well-established financial advisor can guide you in the right direction.

2. Follow the advice reported by Paul J. Lim. Try investing in U.S. Treasury bonds that are indexed to the consumer price index. Or try investing in foreign companies whose economies and currencies are stronger right now.

3. Keep your budget in check. Avoid making large purchases until you have a better idea what the market is going to do.

4. If you have investment capital, you can invest in real estate while prices are dropping because realty is always a good, long-term investment. Just make sure that you can afford the insurance and property taxes over the long run.

5. Keep your finger on the Fed. The things that the Fed does to help stabilize the American currency aren't always helpful, but it is wise to know what they are planning and how it might affect your investments.