Will they or won’t they?
As the eyes of the nation remain riveted to the halls of Congress in anticipation, or dread, depending on perspective, of a financial rescue bill, the seven billion dollar question for you on the ultra microeconomic level is where to put your money.
Should you roll the dice and throw good money after bad in the stock market, wagering that the implosions of the past week have created buying opportunities instead of additional seats aboard the Hindenberg?
Should you reinvest what’s left of your portfolio into Real Estate now that prices have crashed, before the ability to obtain financing dries up completely?
Should you plug everything you have into a federally insured two percent vanilla savings account?
I don’t know.
I am but a simple Realtor.
I choose to keep my money invested in what I know, so owning property is always most appealing to me. Does this mean that gobbling up every piece of cheap dirt is right for everyone? Certainly not. I have a vested interest in selling you property, just as your stockbroker has a vested interest in getting you more heavily invested in growth funds.
Your insurance guy called, too. Something about being grossly under-insured against Sasquatch-related decapitation? No fear, he has a policy that is right for you.
While no play is inherently right or wrong (though your insurance agent strikes me as a bit dubious), don’t be oversold on any one investment avenue.
Be clear, however, I am a very big believer in Real Estate right now. Rather than fighting over scraps at the buffet when everyone else is jockeying for a seat, I prefer to wait for the collective belch before dessert. It is a short-lived phenomenon, but provides the opportunity to get while the getting is good.
Now that the bloated diners have all temporarily pushed away from the table, I have relatively unimpeded access to the fudge brownies, cheesecake, key lime pie … whatever strikes my fancy. I might gorge on one particular delicacy, or I might help myself to a few nibbles of each. I could plunk down all of the cash in my jeans for the hot fudge sundae, or I could spread my funds around to ensure my palate finds what it likes.
Of course, this requires credit.
For the time being, there is still financing available for those with solid cash reserves and a good credit rating. I won’t be one to ring the panic bell, but it is possible that financing options will become even narrower before the current crisis is successfully navigated. In six months time, we just might be down to borrowing money from B of A and your crazy uncle Al who has been squirreling money under the porch for the past twenty eight years.
As such, those who are waiting to squeeze every last price drop out of the market prior to purchasing do run the risk of waiting themselves right out of a loan. Agent or not, I will be the first to admit that prices very well might continue to slide for the remainder of the year. Yet, if credit becomes more expensive (rate hikes) or unavailable to you (tightening qualification standards, bank failures), have you made the smart play by continuing to hold out for that absolute rock bottom? Shoot, we could start giving property away for free, and there would be those still waiting to see if sellers would pay them to buy their homes.
It’s not as cut and dried as the man on the street may believe. Trends are trends because they do not last forever. They do not constitute mathematical law. I’ve had many ask me why they should buy now when they are essentially making $10,000 a month by not buying. To this I simply note that the dynamics of the market are always changing. Many people got into their current jams by making the opposite assumption: that the appreciation explosion would never end. As such, they made foolish choices, such as holding onto multiple properties they couldn’t actually afford. Buying new houses and renting out the old place at a loss on the assumption that it would be worth hundreds of thousands more in a year’s time. Oops.
The boom in my area, the frothy artificial spike that is, lasted for all of six to eight months. We are already well past that in this depreciative cycle. Recent economic woes aside, I’ll take my chances on the investment that puts a roof over heads in a historically desirable area. And I’ll take those same chances now, when the market is weakened and my options are plentiful. If my financing options evaporate over the next year, have I saved anything by waiting?
Again, take what I say with one family-sized grain of salt. I make my living selling houses. But if you are of the same mind, give me a call. I can’t guarantee that we will make you an instant millionaire by urging you to “BUY NOW!!!” as the informercials would have you believe, but I can find you some tremendous values that I believe will prove to be excellent long-term investments.
Now go call your stock guy, and he will give you a similar pitch. When you are done talking to him, flip a coin, say three Hail Mary’s and move all of your money into Bobblehead Dolls.
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Paul I think your sabbatical did wonders for you. This is another great post. I actually told someone yesterday not to sell, and told someone else to buy. We do need to try and help folks make the right decision for them.
Thank you, Melina. I've had to do that a few times recently as well. The thing that drives me nuts is the assertion of some that NOW IS THE TIME TO BUY, or NOW IS THE TIME TO SELL! The Jim Kramer way of thinking does not take into account the varience in circumstances for the audience. I can't tell someone that now is the time for them specifically to buy without knowing all of the goals, finances, etc. I can tell them whether or not the market at large is conducive to getting a good buy or selling at a premium. From there, they need to weigh their individual circumstances to conclude whether or not it makes sense at present.
Paul, I only have $5 bucks. What's a girl to do?
Paul, if all I had left was $6, I'd give it to you so that you can get the sasquatch insurance coverage you need. Not even you could make that up.
How many bobblehead dolls will my last ten bucks buy me?? Seriously funny post but actually serious as well. I will now avoid my insurance agent like the plague, call my Realtor buddies to see which one of them can make me a millionaire and ask my broker if bobbleheads are a good commodity to speculate on...
Kelly - Sounds like you need to form a consortium or LLC with about 20,000 partners. You and I make two. I bet we could find 19,998 more right here on AR ;)
Amanda - $6 for Sasquatch Insurance is a value, I'll give you that. For an extra $3, my guy will throw in a Yeti rider.
Beth - You've got ten bucks? I wouldn't go around announcing that to this crowd. Them's some high falutin' numbers. Of note, Bobbleheads are always a good buy. Oversized head, pencil thin neck ... and forward/back or side to side motion and you have hours of entertainment. Throw in celebrity likeness and you've got yourself a growth industry!
I really must object to the fear mongering of this post. Sasquatch are gentle, shy creatures that would NEVER decapitate anyone!
About the market, well, I guess you've got that right. Each situation is different and one's action depends on the variables of one's financial situation. There are some that would do very well to buy into real estate investments at this time. There are some who should not sell right now. Our job is to help people see where they are in the spectrum of this market.
Elaine - My foolhardy, Elaine. It is cowardly apologists like you who would rather the Sasquatches run amok in our cities and bathe in our pools than actually fight the heathen beasts. You can't negotiate with a Sasquatch, Elaine. They can't be hurt, don't feel pain. And they won't stop. Ever. Until you are dead. Or they find beef jerky. One or the other. The point holds, however. You can either go fight the Sasquatch where they live, or you can fight them here after they have taken up permanent residence in your beloved canyon. Just don't come crying to me when Yorkies and Puggles start going missing. While you cower in your ivory tower, free from concern about the epidemic that faces our great nation, I will chase the Sasquatch to the gates of Hell if need be. Slaybaugh Doctrine holds that I also get to burn down the log cabin of the mountain man who harbors him. That is what we in the lunatic business call a "tacit accomplice."
Your days are numbered, Bigfoot.
"I'd like to teach the world to sing
In perfect harmony..."
Did you say something?
Elaine, are you mad? Do NOT give that Sasquatch a Coke! The only thing that makes a dangerous hirsute creature even more volatile is carbonated caffeine! You just don't get it do you, Elaine? You lack the experience necessary for dealing with Sasquatches.
So you're saying a tea party would be better? In my vast experience in promoting a better understanding about the Sasquatch culture, I have found that soft drinks smooth the path to global understanding and acceptance. Except with yetis, as they prefer hot chocolate.
Tea parties? Hot chocolate? Why not just invite the Sasquatch over for a friendly game of Balderdash? Just don't come crying to me when he devours your bleeding heart while you try to think up a sufficiently witty definition for the word "hurmaglobulous."
Sasquatches prefer to watch Jeopardy. They dig Alex Trebek.
I have dibs on the Sarah Palin bobblehead copyright! Now, Phil, where does one fabricate said doll?
I, too, am but a Realtor (realitor in kansas) and just an idea guy. The execution is left to those more knowing.
Yeah, Phil, where do you fabricate said doll?
When the market is really volatile like this, it's important not to make quick, emotional, irrational decisions. Your choice to keep money invested in what you know is a solid one. Eventually the market will 'iron out' the activity of the last week -- it always does.
Of course, if I was down to just $6.00, I think I'd get a double-double at In 'N Out while I plan to rebuild my financial empire.
I cannot freaking believe that you let out the secret on bobblehead dolls! The little known truth is that these replicas have provided consistent year-over-year returns of 11.34%. As more speculators enter the market, I fully expect that number to increase. Yes, it might create a bubble that will quickly crash when some glory-seeking insider exposes the actual costs to manufacture these complex collectibles is a bit less than one might think. However, my plan was ride the bubble up and then jump to Transformers before the peak. I needed two more weeks to finish liquidating my Legos assets, but now you have gone and let the cat out of the bag. Damn you Phil Paul!
Elaine - Jeopardy is too hard. Of course your intellectually elitist friend would favor it.
Dean - Where else? We fabricate the little things in China. We subsidize their labor force while ensuring that we receive a poorly constructed, lead soaked product in return. It's the American way.
Lisa - Phil this.
John - A double-double is a bit extravagant for one with such meager means. How about we slow down and take it one patty at a time if we are talking about responsible deployment of dwindling funds? It is the supersizing of American tastes that has led us upon the path to ruin in the first place. My grandfather would have ordered the pickle, returned half for a cash refund, and walked home uphill, backwards. We need to get back to those values.
Erik - So you were slow playing the sale of your Lego assets so as not to undercut their value? Clever. I think you may be making a mistake, however. Blue chip assets like Legos have a timeless appeal that make them relatively safe long term plays. Bobbleheads have big upside, but only a highwire enthusiast would trade a sure thing for a hot, but unproven commodity right now.
(Don't tell anyone, but I'm trying to complete my Bobblehead acquistion at present. We can talk their value up later.)
Slaybaugh - Personally, I was burnt years ago... as my vast collection of baseball cards took a market dump. The very thought that I can't retire even though I own Roberto Clemente 'stock' irks me more than watching a re-run of Saved By The Bell.
In my opinion, most of the market is speculation and perception. The old 'it's between the ears' advice seems to yet again reign true. There will be a lot of folks who find great opportunity and profit in a time like this, yet they will also have to have the forethought and ability to do so. The 'It's a great time to buy' doesn't apply to everybody. Try telling that to the person who can barely afford their utility bills and has a credit score of 520 with $20.00 in the bank. Then again, at least that $20.00 is FDIC Insured;-)
Of note, I did receive a Beanie Baby as a graduation gift from an unnamed source... should I be knocking on Mr. Buffet's door?
Sardi - I got crushed in that same sports card market fallout of the early 90s. I had a small fortune amassed by my pre-teens. Walter Payton, Larry Bird, Magic Johnson, Jackie Robinson rookie cards. Mantle, Maris, Clemente ... I could field quite the team with that collection, unfortunately, the value went the way of the DOW. I'm telling you, though, this Bobblehead thing ...
Walter Payton (the real man) is still one of the baddest running backs of all time (and he did more with less than most)
As far as $$$, I just sent my son to college (and he even received a partial scholarship) so I don't have a dime, insured or not.
I like your posts (and recently was considering making my own shorter) and the fact you have such an interesting eye toward a variety of subjects. Glad I signed up for more!
Russell - My all-time favorite player. They just don't make them like Sweetness anymore. My second favorite is from the opposite side of the spectrum. I'm a Steelers fan, and they don't get any more iron city than Jack Lambert.
I'm glad you signed for more as well. As to length, I keep hearing people mention that we should cut it down and make our posts more easily digestible. I just can't do it. I could probably stand to edit a bit more, but I never pay any attention to word count. If it takes me three words to say it, great. If it takes me three thousand, equally great. Each piece requires a length of its own choosing. Who am I to argue? My final thought on the brevity versus substancive debate is one of audience. Many write for the lowest common denominator. That's a good approach, but I tend to use my blog as a screening device. If the Short Attention Span Theater crowd are turned off, there is certainly no shortage of three line alternatives. Do your thing, Russell. We are in the unique position to attract those we wish to attract with our blogs.
Jack Lambert...damn that's a powerful name and I am a life long (since Dandy Don Meredith even) Cowboys fan. I get you and I also enjoy the few posts I have put out there. I have s l o w l y found my voice more or less with the help of folks like you, Jason, Rich, Sardi, Jennifer and a few others while keeping in mind that this part of my life is business. If I ever establish another Blog it would be devoted to all sorts of everything that bounces around in my wide open, way out there on the range, mind! From Metallica to Mozart, Hunting to feeding the homeless Cooking, camping, running, traveling, anarchy to Zappa and I am sure more than a few screeds on how I think the world is F'ing up. It's all good and this is just a brand new place for me to play! Thanks and I WILL be seeing you around my friend!
I knew a man with a rather long yearn
for dirt, a few bricks -- the captain's chair on the stern
where he'd store his coins in an old gunny sack
and seeing drunks swagger out of the bank
unleashing the most merciless attack
separating fools from deeds in a matter-of-fact.
:)
Good post Paul...
For many people this truly is a dilemma, but I'm a firm believer in the wealth building ability of real estate. I advise our clients, all around the country, to invest wisely in growth markets with strong local economics. This is the same way we select our investment real estate offerings.
So, skip the Bobblehead Dolls and go for the good real estate deals.
Marco Santarelli
Norada Real Estate Investments
(800) 611-3060
www.NoradaRealEstate.com
Your Premier Source For Real Estate Investments
There once was a man named "E" from Nantucket ...
Gee, I wonder who is this poetic "E"?
Sardi - Who knows such things? One thing we can be sure of, however. His skin must have an orange hue from excessive carrot consumption. How else is the acute vision explained?
Perhaps he was born with two sets of eyes, the other pair found between the H and the J.
Marta - There is no "I" in blogging... or is there? One makes you larger, one makes you small. How long shall we continue this silly mess?