Global Real Estate Looks Like the Next Bubble, Says WSJ's Greg Zuckerman

From technology to housing to commodities, investors have been moving from one bubble to the next over the last 10 years. Rather than a passing fad, the trend is here to stay says Gregory Zuckerman, Wall Street Journal reporter and author of The Greatest Trade Ever – a book that chronicled Jim Paulson’s multi-billion dollar bet against the housing bubble.

Paulson made his fortune betting against the pack but that's not how most professionals succeed, Zuckerman observes. "The incentive is not to be a contrarian on Wall Street," he says; instead, most traders, "chase the trade way too often."

This herding mentality combined with ease of trading thanks to computerization and new vehicles such as ETFs, plus low interest rates explains why we're living in the "age of bubbles," he says.

What's the current bubble?

China is always high on everyone's list. However, Zuckerman seems more concerned about global real estate. Rising prices in China, Australia, Canada and even Israel could lead to new bubble, he says.

"Wherever interest rates are really low and yet people don't have too much debt – like they are in this country- real estate is actually shooting higher," he tells Aaron and Henry in the accompanying clip. "Which is kind of troublesome."

How should investors protect themselves in the age of bubbles?

Zuckerman recommends several strategies:

--Buy downside protection. An easy way to do this is through inverse ETFs.

--Keep more cash. Have 6-12 months of living expenses handy instead of the traditional 3-6 months.

--Don't buy and hold. In this age of volatility, Zuckerman says, investors may be better of taking profits.