Holding on for a higher price. Won't work. (for sale, renting)
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A very good friend of mine, and a pretty smart guy, otherwise, said to me yesterday,"....but first we have to sell our home, and the agent says it is worth $150,000 less than it was three years ago. I just can't sell until I can get what it is really worth."
I remained silent. What could I have said that was not incredulous? Nothing I could think of.
A very good friend of mine, and a pretty smart guy, otherwise, said to me yesterday,"....but first we have to sell our home, and the agent says it is worth $150,000 less than it was three years ago. I just can't sell until I can get what it is really worth."
I remained silent. What could I have said that was not incredulous? Nothing I could think of.
A very gentle and beautiful way would be like this:
A very good friend of mine, and a pretty smart guy, otherwise, said to me yesterday,"....but first we have to sell our home, and the agent says it is worth $150,000 less than it was three years ago. I just can't sell until I can get what it is really worth."
I remained silent. What could I have said that was not incredulous? Nothing I could think of.
LLN - The sad thing is there are alot of people out there that think the same thing! I really feel for the people that owe so much more than their home is worth and don't have the money to make up the difference.
I wish I felt differently but I don't see our housing market picking up for years... I think as values continue to drop we will see more and more foreclosures and values will continue to decline. Some will look back to todays market and wish they would have sold!
A very good friend of mine, and a pretty smart guy, otherwise, said to me yesterday,"....but first we have to sell our home, and the agent says it is worth $150,000 less than it was three years ago. I just can't sell until I can get what it is really worth."
I remained silent. What could I have said that was not incredulous? Nothing I could think of.
I feel awful for your friend, just as I do for all of us, as doubtless our homes wouldn't sell today for what they would have sold in 2006.
It concerns me, tho, that folks really believe that the value of their homes is going to increase that much even IN THE NEXT DECADE, lol.
It just isn't gonna happen. Even a modest gain of 3% would be welcomed by most of us. Anyone that knows the history of housing over the last 50 years knows that even getting 3% annually would be good - and 6% would be a huge harrah.
There will never be a time (in my life) that I will see real estate jump in INFLATED value as it did in this past decade.
cc, you need to clarify this statement because people can misunderstand what I THINK you are saying.
You (I assume) mean when you say "real estate is the best investment", you mean people who "flip" homes or rent out as landlords, correct?
You don't mean buying a home and hoping your house appreciates double digits, correct?
The stock market can be a great tool over the long term to achieve your financial goals if you are diversified and ignore the noise of the market and in it for the long term. It certainly has helped our family get on track to meet them....Too many people took on too much risk over the past 2 years and lost a ton on paper when they should've been way more conservative (I'm talking about those closer to retirement)...it was a good (or bad) wake up call for many.
No, Coupon, what I mean is...buying real estate and then holding onto IT for the long term. For example, I have a small (.50 acre) lot near to Morehead city that I bought under foreclosure a couple of years ago. Tax value is about 3 x what I paid for it. However, I know that it is now in a declining market. I plan to hang onto it until I get what I want for it...OR...for another 20 years or so (whichever comes first).
Another example is...I want to buy a small condo in Chicago. Know the area well, the price under foreclosure is about 1/3 of the tax value. If I could get my money out of my 401k without a penalty (or a loan) I would snap it up. (assuming that it looks like the pictures show). This would be another retirement investment. In the meantime, I could use it as a place to hang my hat when I visited and, perhaps, when I retire (assuming that ever happens! ) I could either use it for a snowbird-like residence, OR, sell it for a decent profit. I also could rent it out (but probably not) and make up the money that way.
I AM looking long term. Experts say that the stock market will not regain its profitability for 10-15 years. My small real estate investments will regain their profitability before then if I choose to sell them. And, my primary home will be paid for, too. So, this is my strategy. I may not have a lot of funds to live off of, but, I would at least have a roof over my head.
No, Coupon, what I mean is...buying real estate and then holding onto IT for the long term. For example, I have a small (.50 acre) lot near to Morehead city that I bought under foreclosure a couple of years ago. Tax value is about 3 x what I paid for it. However, I know that it is now in a declining market. I plan to hang onto it until I get what I want for it...OR...for another 20 years or so (whichever comes first).
Another example is...I want to buy a small condo in Chicago. Know the area well, the price under foreclosure is about 1/3 of the tax value. If I could get my money out of my 401k without a penalty (or a loan) I would snap it up. (assuming that it looks like the pictures show). This would be another retirement investment. In the meantime, I could use it as a place to hang my hat when I visited and, perhaps, when I retire (assuming that ever happens! ) I could either use it for a snowbird-like residence, OR, sell it for a decent profit. I also could rent it out (but probably not) and make up the money that way.
I AM looking long term. Experts say that the stock market will not regain its profitability for 10-15 years. My small real estate investments will regain their profitability before then if I choose to sell them. And, my primary home will be paid for, too. So, this is my strategy. I may not have a lot of funds to live off of, but, I would at least have a roof over my head.
TOTALLY see what you meant, CC. I don't think I understood what you were saying earlier, but now I do and you are right - even the security of "having a place to hang my hat" is often immeasurable as far as "value."
Last edited by anifani821; 05-23-2010 at 02:37 PM..
We've made it public knowledge to the folks we're meeting that we're renting this year to "get a feel for the exact area we want to buy in" / etc... A few of them have been so nice pointing out "steals" in their neighborhood, wishing we'd become their neighbors - which I think is awesome. I'd be proud to live next to these people, but I don't know how to explain nicely about what we're seeing in this market.
Perfect example is a house a woman took a picture of with her mobile phone and showed my wife last week... It was a 500k house in a neighborhood you'd normally be shocked to see available. "This is such a steal, you guys have to come live in our community!". Believe me, it's an awesome community... Well, 2 days ago a short sale hit MLS with more sqft under the roof down the street from it - for 447k. Scary.
My commentary is that to "assume" that because stocks have been historically a good place to put money, that they will continue to be that way. Furthermore, the stock market has been turned into a giant casino that is dominated by low volume (real investors have left) and high frequency trading. This is not your dad's stockmarket and if you decide to play here, you better have some cajones of steel. When it can drop 1000 points in a few hours, and some stocks can go to 1 cent during this time, and nobody will say why, this isn't a place where sensible people should have their investments. Not until this snake pit has been cleaned up.
The stock market is like most other things. If you don't know what you are doing, you can get seriously burned. Hell, you can get burned if you do know what you are doing but end up the wrong side of the trade.
Its true, the indicies as a whole are basically flat over 10 years. Good mutual funds beat the s&p for the same period, but its not hard to beat 0%.
That said, there are plenty of ways to play this market --- just like everything else you got to know what you are doing. You have to be willing to be an active investor. You don't just blindly throw money into a 401k and allocate 33% for the 2020 2030 2040 freedom funds. Well, you can---but I wouldn't hold my breath.
1000 point swings are awesome buying opportunities. If you don't want to be on that side of the market, you can always sell short, sell calls or buy puts--whatever floats your boat. Its just like everything else, you got to change with the game or get left behind.
1000 point swings are awesome buying opportunities. If you don't want to be on that side of the market, you can always sell short, sell calls or buy puts--whatever floats your boat. Its just like everything else, you got to change with the game or get left behind.
What you describe is beyond what most sensible people should even think about attempting. i.e. Talk is cheap. Nobody ever brags about losses in the stock market, but someone sure as hell lost given that $50T (trillion) disappeared from the global stock market over the last decade. A 1000 point swing that happens in a few hours is not a buying opportunity when it happens so fast that all but the most connected of brokers can participate in it. I recommend Vegas, it's more fun and the odds are not as stacked against you.
My statement didn't have anything to do with this. I recommend reading it again. I was commenting on the fact that you said that the best bet is to go long in stocks. Now you are saying that you need to pick and choose stocks for this to work. Sure you can make money this way but it is nothing but a crap shoot. Stock holders of General Motors, Enron, US Airways, and the 700 banks that have been shutdown over the last couple of years, to name a few, will all tell you so.
My commentary is that to "assume" that because stocks have been historically a good place to put money, that they will continue to be that way. Furthermore, the stock market has been turned into a giant casino that is dominated by low volume (real investors have left) and high frequency trading. This is not your dad's stockmarket and if you decide to play here, you better have some cajones of steel. When it can drop 1000 points in a few hours, and some stocks can go to 1 cent during this time, and nobody will say why, this isn't a place where sensible people should have their investments. Not until this snake pit has been cleaned up.
There are always some bad companies in the stock market (along w/good ones), that's why its important like i said to be diversified and invest for the long term. I've made money over the past 10 years w/o investing in INDIVIDUAL stocks. All this talk about cajones of steel or gambling doesn't affect people who understand how to invest correctly. Those are just scare tactics (along w/sayings like "no one made money over the past 10yrs....pure rubbish....)
People who have gotten in trouble weren't properly diversified or were weighted too heavily in one sector (ie people who have 5 or so yrs till retirement were 65% or more invested in stocks....very bad.)
The CNBC's of the world and their ilk (ie Jim Cramer) should be for entertainment purposes hurt alot of investors because they took on way too much risk then they should've....
Again, the stock market can help you achieve your goals, you just have to be a wise investor.
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) I could either use it for a snowbird-like residence, OR, sell it for a decent profit. I also could rent it out (but probably not) and make up the money that way. 
