What goes up must come down.
That is the concern of many as the stock market is in all-time-record territory. Some of the wary are interested in moving a portion of their portfolio into something more stable, like real estate.
Real estate offers the ability to create memories for a lifetime, and generational wealth.
Are concerns about the stock market legitimate? The answer you get will depend on who you ask. Everyone loves a winner, and there is a crowd who is excited to see the stock market setting new highs.
I am not a stock broker, analyst, or even a current investor; seek the advice and counsel of a qualified, licensed securities broker before making any decisions.
Here are some of the concerns of the contrarians:
1.) Easy money – low interest rates and QE – quantitative easing where the Fed fired up the printing presses and has flooded the markets with cheap, easy money and the potential for longer term damage in the form of inflation and higher interest rates.
Quantitative Easing has had multiple rounds, and the experts are not all in agreement what the long term repercussions will be. The markets can react, or overreact, to concerns.
2.) Some feel that companies have done too much cutting in pursuit of higher stock values. Everyone can agree that cutting the fat makes perfect sense. Lean and mean profit-making machine.
However, when the cutting continues and core strengths and customer services are cut too much, a company is actually too weak. Removing the muscle and sinew just leaves bone, and bone by itself isn’t very capable. The stock gains seen in over-cutting will be followed by losses as companies falter in the marketplace.
One phenomenon that I have witnessed in past stock market corrections is a move of investors out of the equities markets and into real estate. For a pure investment (where you are not going to use the property personally) real estate can even be purchased in a self-directed IRA for tax advantages.
Properties can be used personally on occasion and still garner tax advantages (talk to your CPA) and some folks just like the idea that real estate is tangible. You can see it, touch it, even walk through it, sleep in it and enjoy it with friends and family.
When is the last time your family spent a cozy evening inside your stock portfolio?
Vacation-area second homes are another popular investment for money that folks pull out of stocks and decide to enjoy while it appreciates. Heck, even if the market stumbles again, you can still use the property as intended.
Again, real estate offers the ability to create memories for a lifetime, and generational wealth. Contact your favorite Realtor to see what opportunities are available to you in today’s market that match your long-term goals.
All the Best!
Jim Sweat, ABR, CLHMS, CRS, CDPE, GRI, e-PRO, ILHM
Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)
Jim Sweat – Helping Buyers & Sellers Choose Wisely Since 1995 ™
Re/Max Alliance Group
http://myfloridahomesmls.com/JimSweat (Home Search)
A Proven Professional Working for You!
21 Years Experience