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Do You Also Wonder if the Recent Stock Market Scare Will Kick Start Real Estate Buying Spree?
Having worked in banking before I started my real estate, property management and property flipping endeavors - I've been wondering lately : will recent stock market scares create a new surge in real estate investment?
In August 2015, the stock market proved just how volatile and uncertain it can be. In spite of warning signs, many kept using stocks as the ‘easy’ option to invest. Even though many company’s stocks trade for ridiculous sums, people kept buying in. In a single day, the stock market saw $1.4 trillion in wealth eliminated. That was a Friday. When markets opened the following Monday, the market lost another trillion dollars. A single investor lost close to $4 billion in those couple of days. What’s ironic is that stocks really haven’t been delivering any amazing returns in recent years. Most may average a 5% to 10% return over the long haul. People can sometimes find close to those returns on certificates of deposit, with less volatility. Then there is real estate, which can offer better growth and yields, with even less downside. Hopefully millions will heed the warning and adjust their investments accordingly.
Everything may fluctuate over time: the value of properties, the value of companies, and even the value of the dollars in your wallet are all subject to change. The difference is that some things are more volatile than others. Some fluctuations are more predictable than others. It’s pretty easy to forecast real estate changes, and they are slow to move. Stocks, on the other hand, can plunge unexpectedly in a matter of hours. They lack the safety of physical properties. It is interesting to note that even in the lows, real estate can keep on throwing off almost the same amount of cash flow.
It’s Time to Freak Out and Sell Stocks
As the smart money exited the stock market and numbers plunged into the red, the headlines said not to panic or sell. That clearly means it was time to panic and get out for many. Depending on when you are reading this the market may have clawed back a few points, or dipped further. It’s smart to remember that little uptick before the real dive, and that these declines can go a lot deeper and longer than anyone likes to believe. There is no question in any analysts’ minds that the stock market is headed for a massive ‘correction’.
- See more at: http://www.cthomesllc.com/2015/08/stock-market-scare-to-kick-start-real-estate-buying-spree/#sthash.senimPlF.dpuf
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