Mostly in the blog I talk about Commercial Real Estate and investments. Today, though, I came across an article that caught my eye, and I’m going to pass these suggestions on to you - just in case you might be tempted to panic with the stock market gyrations. The news is grim. No doubt. The stock market hasn’t seen this level in many years and people are worried. The bailout of the banks and financial institutions is all the talk.
Still, you can protect yourself. Here are five tips to help you weather this storm.
1. Don’t panic. This market has given even the hardiest investors a case of the heebie-jeebies.
Converting all of your investments to cash at this time may cause you more harm that good. Unless you need the money short term - say, within two years, its best to remember that good and bad times pass. Historically, the market’s made up all its losses fairly quickly.
Since 1945, there have been 11 recessions as officially defined by the National Bureau of Economic Research. The S&P 500 — the index of widely held stocks used as a barometer for the overall market — generally has hit bottom six months into the typical 10-month-long recession.
After that point, the market typically starts regaining its footing. If you include the very worst meltdowns, when the S&P 500 lost more than 45 percent of its value, it took 19 months for investors to recoup their losses. But exclude the mega losses, and you find that it’s actually taken just eight months on average for the index to bounce back.
In other words, don’t freak out. Stay calm.
2. Don’t put all your eggs in one basket. We’ve all heard this many times, and actually, right now would probably not be the best time to re balance your portfolio.
But, if you’re reading this you are probably already a Property Scout. And as all good scouts know, investing in Commercial Real Estate takes time. But if you’re working the process, you have definitely started another nest for your “eggs for the future.”
Some of you may already have a good job - that’s great. I’ll be talking more about that in Tip number 4. Even if you do have a good job, Property Scouting can be a hedge against losses you might be taking now in the market. If you’re losing money now, even though the market will eventually rebound, continuing to invest in your future through Property Scouting may pay off big for you down the road.
This is the time to ramp up your search and find the golden opportunities.
3. Don’t allow your home to become a trap. This could be a catch-22 if you still have a mortgage on an option ARM (Adjustable Rate Mortgage.)
If, you’ve been reading anything lately — and how could you not-about the sub-prime melt-down and the supposed catalyst to the current market debacle, you know the dangers of the option ARM.
You may have gotten in to your home with an initially low interest rate - knowing that at some point the interest rate would rise - along with the payments. If you’ve got a relatively new loan with an ARM, you may be able to ride it out until the storm abates.
If you’re unlucky enough to be nearing the end of the low rates, you could be in for some problems. Try to get your house refinanced if you can. Otherwise, tighten your belt and hold on as long as you can. New legislation passed within the $700 Billion rescue package, could help you!
4. Update your resume. Working hard can help protect your job, but may not be enough. Instead, be strategic and figure out where you stand. Workers who cost employers money are most likely to be laid off. These include support staff in bureaucratic positions or workers in overstaffed departments.
By contrast, employees who add to a company’s revenues are more likely to be viewed as valuable assets. So, try to take on work that no one else can do, or volunteer to head up long-range projects vital to your employer.
Meanwhile, start networking now. It takes time to get a new job, especially if you’re already several rungs up the career ladder. Entry-level employees in lower-paid positions need roughly two months to get re-employed. But higher-paid executives generally will spend five months on average to find another position.
5. Look to the long term. Its’ more important now than ever to take a long-term approach to your future.
That’s the good news with Property Scouting. Finding the right property in this market, that our investors can pick up at bargain prices, will mean a big payout for you in a few years. This could be just what you need to weather the storm.
It seems that everyone I talk to now, is amazed by what’s going on. It’s actually a historical time to be alive - and for some it’s very exciting! For others its more disconcerting.
Just remember, the market always recovers. We live in the greatest county in the world, and we Americans are not just survivors - we’re THRIVORS! I plan to thrive - I hope you’ll join me!
So as a property scout, I am always talking to and listening to my friends in the know. I am also asking about new properties and deals all the time. YOu never know when one will show up.
If you are a scout keep looking. If you want to be a scout, check out http://www.nacreps.org
Till next time.
Ted
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment