Wednesday, September 24, 2008
I just notes that a blue chip stock fund that my sons college savings was in is down 17% since this year. And that is the Good stuff. Blue Chip Stocks. These are companies that own stuff and will not go to zero value when they have problems.
Very few who have income real estate have losses anywhere like that. Anyone with an income producing property is still paying the bills and making the tax and insurance and loan payments. The tenants still need homes etc.
When your stock broker says to diversify... Say "yes I will" and take some of your money and put it in a real asset. Buy an apartment building! Hire a reputable real estate professional to manage it and be safe and diversified.
You want less risk still? Buy some in an area that will not be hit by the same earthquake or hurricane or tornado!
This bail out to Wall Street that the politicians are asking us to buy into is way over the top for me to swallow. Loan backed investment pools should have been rated just like state bonds are rated. Anyone who buys a car will look under the hood. Wall Street sold a lot of these with no one checking. Are these secured loans? Are they performing? How many are seasoned? What percentage had 100% or 95% financing? Stated income and low FICO scores? The shortsighted bought the 'pig in a poke' when they did not look under the hood and bought the investment. Blinded by the higher return. Higher return = Higher risk.
Wall Street is all about risk vs return. The recent "Stock Bomb" wake up call still must reverberate in some of your mental time lines. Stocks based on the future value of the idea that the .com company will be able to leverage into a future business. Smoke and mirrors.
Real estate and housing run up as the latest "who wants to be a millionaire" frenzy got the stock market buy in... In a very big and stupid way.
The Federal Government should not buy out all the bad debt. Uncle Sam is not the Next Biggest Fool. Then that leads to the average taxpayer taking the hit for a stupid wall street suit/executive/snake oil salesman. The investors should possibly go after them in civil court for negligence or some form of malfeasance. But the judge may point out that they bought in and took the risk.
If you can not handle the risk then buy insurance or a safer vehicle to place your money.
There is risk you like and risk you do not like.
Some feel the risk of using a motorcycle is way to risky. And yet they put all their trust in a stock market man to keep them supported in retirement.
Some of you may have enough Capital left to buy an apartment building.
If so and you want a dependable rental income... Call me.
Tuesday, September 16, 2008
"Treasury Secretary Henry “Hank” Paulson on Sunday: no more federal bailouts...
Finally, someone has hit the brakes where they need to be hit. The federal government and taxpayers such as you and I can’t go bankrolling or brokering the mistakes of Bear Stearns, Countrywide Financial, Fannie Mae and Freddie Mac."
Ok so as long as the lenders can make a real loan to a real client and the terms are not outrageous we are going to have support for the real estate values.
So relax a little. Do not think that you must have a heart attack. Take a bigger view of this correction.
Buy in if you plan on holding 3 or more years. If you are a flipper... Well then you had better be able to do it cheaper and better than the stuff on the market.