Real Estate Cycles, Lemming Effect….and Wise Investor…

Greetings from Cedar Crest, NM….

In my last blog I talked about the "Lemming Effect" and the current market.  I also talked about the fact that wise investors profit in a great market as well as in a poor market.  Well….in today’s blog I want to talk to you about how an amateur real estate investor can become a wise investor……building wealth in a down market.

CYCLES

One key point to understand is that all investment vehicles have cycles….period.  Markets go up and go down….that is a fact.  Of course there are variables that dictate the length of a cycle…but none the less….they exist.

The Lemming Effect kicks in when people continue to buy at above market values…..everyone wants to be a part of the action…..which drives the market values even higher.  Lemmings get caught at buying high….which results in selling low.  Here is where the opportunity is.  Wise investors buy low….sell high.  So if you catch what I am writing here….Lemmings create opportunity for wise investors…wise investors sell to Lemmings at or above market prices…Lemmings sell to wise investors below market values.  How about that for a cycle?

So…If you understand what I am saying….we are seeing liquid investors getting ready to feast on opportunities in the coming months and possibly years…while Lemmings are seeing their investments lose value and trying to salvage whatever they can….by selling.

WEALTH LIFELINES

Yeah…sure…you knew that was coming…but think about it….who are you getting your current investing education from?  Amateurs or experienced, time tested, successful investors?   Who do you have relationships with…..those that hang out at investment clubs and teach theory or experienced investors that teach based on experience?  Who are you listening to? Gurus that make their money teaching and not investing.  Or Gurus that teach and invest?

Building your wealth lifelines with those that have the knowledge, experience, and know how to find opportunity in a down market is where you need to be right now.  Listen to the "nay-sayers" so that you know to avoid their advice and find those that are excited about the direction of the current market.

Until next time…..rob

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