6 WAYS TO MAXIMISE YOUR PORTFOLIO - from Jack at Think Investment Realty Number 3 - ‘Timing’ the market and ‘time in” the market Two important parts of creating long-term wealth with property are timing the entry point into a market to maximise the capital growth, and time in the market -meaning keeping the property long-term. Timing the market often means being brave and bucking the trend. Purchasing a property when the property clock is at six o’clock is one of the hardest things for a novice investor to do. The ‘history’ shows a flat market, no growth for five or six years, and usually a lot of negative press about property. The media never talks up investing in property in an area until it has already been showing major growth over a period of time. Often this leaves your run a bit late, and you have missed all of the strong initial growth. Most people buy in at 10 o’clock – and only gain a little before the market again flattens out. Time in the market is vital for successful wealth creation. Most property averages 10 per cent pa over any 10-year period, however, you don’t earn 10 per cent each year. The market usually has two or three years of strong growth, five or six years of flat or no growth, and even one or two years of negative returns. Holding onto property during these times is hard if you don’t look at the big picture and know that eventually all property will increase in value. I hear people say time and time again, “I sold a property and two years later it doubled in value”. Keeping property is the key to building a large and successful portfolio. Number 4 coming later today...
Posted on: Thu, 15 Aug 2013 23:18:02 +0000
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