Our point is this: you can prosper, even thrive, regardless of what the economy is doing. We saw many investors go under during the peak boom years. The situation is easily reversed and those that have the guts and smarts will prosper over the coming years.
The stock market will stay decidedly volatile for a number of years. One of the keys for investors will be to let go of our natural optimistic natures when considering future investments. The best course of action may well be to stay short the market for a number of years or in cash.
YOU CAN PROSPER IN TODAY'S ECONOMY, IF YOU MAINTAIN YOUR SANITY WHILE OTHERS ARE LOSING THEIRS.
The stock market offers liquidity and we have certainly come to appreciate that as the real estate sales have dried up. But there is an inherently large risk associated with investing in the stock market, and investors must be willing to ride severe volatility, all the while finding key entry and exit points. If you can do this, and we have a few services that have demonstratated the ability to do this very successfully the past year, then stock market investing beats dealing with the hassles of real estate. For more information send us an email if you're interested in our recommended trading services.
Real estate done right provides a controllable and even predictable source of wealth generation.
Real Estate Investor Mistakes from the Boom
Investors forgot the basic rules of real estate investing, which is that the price of an investment property should be based on the future income it generates.
Flippers were purchasing property without regard to price per square foot and without regard to whether the rental income would cover the monthly expenses.
Many novice investors got into the real estate purely because greed got the better of them and they were ready to pay any price to get exposure to investment real estate.
Developers forgot lessons learnt from previous cycles and let their greed get ahead of them.
Hype about the prospects for markets such as Florida, Arizona, California, Las Vegas created an over abundance of investors and an over supply of units in these areas.
For decades, real estate has been the most reliable and dramatic wealth generator for millions of people.
Real estate markets bought at value prices - particularly investing in foreclosures - with steady growth represent little risk to investors. A benefit of investing in real estate is that the price of a property will never go to zero. The same cannot be said for stocks, unfortunately, witness Enron.
Real estate investors have more control over their investments than do stock holders.
Stock investments also suffer from sharp spikes in volatility when their price fluctuations have nothing to do with the quality of the company.
Real estate offers significant tax benefits. Today's markets also have opportunities such as in the go zone that enable investors to carry back depreciation writeoffs the past five years or forward 20 years. When you sell stocks, you will pay taxes, there is no way to avoid it. But selling real estate does not create a taxable event, as 1031 exchanges and flexible capital gains rules enable investors to shelter their gains.
Our point is this - either investment can be tremendously lucrative, if done right. Today, the opportunity is in purchasing foreclosures cheap and owning for monthly cash flow. Learn more about investing in foreclosures here.
For the investor that prefers stocks, the opportunities are great as well, but we'd venture that the investor cannot succeed being a buy and hold investor. Swing trading provides significant profit potential. Learn more about our stock market recommendations by sending us an email or use the form button below.
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